(Adds more quotes by Elkann, share price, background on media report)
MILAN, July 1 Italian publisher RCS Mediagroup's main shareholder John Elkann on Monday dismissed press reports of a link-up between the loss-making group and Rupert Murdoch's News Corp, where he sits on the board.
When asked to comment on a possible News Corp investment in the Italian group, Fiat Chairman Elkann said no talks were taking place between the companies. "There are no alliances in the works," he said.
Elkann has emerged as an important player in Italian publishing after Fiat, which already controls Turin newspaper La Stampa, said on Friday it would double its stake in RCS to 20.1 percent after a capital increase needed to keep the publisher in business ends this week.
The surprise move averted a looming power vacuum at the publisher, home of Italy's most influential daily Corriere della Sera, which could have threatened the company's survival if future shareholders disagreed on how to bring it back to profit.
Elkann was nominated last month to the board of News Corp, which began trading as a separate company on Monday. Elkann also owns 5 percent of The Economist, through holding company Exor .
"Our goal is to give the company (RCS) the stability it needs to continue being the important publisher it always has been," Elkann said on the sidelines of a business conference in Milan on Monday.
"We have fellow investors who share our same views and a cohesive shareholder group," he said.
The 400-million-euro ($520 million) capital increase process which ends on Friday is needed to replenish the company's equity after it was eroded by losses from a debt-financed acquisition in Spain.
RCS plans to return profit with asset disposals and staff cuts. Fiat's move to increase its stake increases the likelihood the business plan will not be undermined by bickering between shareholders.
RCS's thinly-traded shares were trading 15.9 percent higher at 1205 GMT. ($1 = 0.7693 euros) (Reporting by Jennifer Clark; Writing by Francesca Landini; Editing by Pravin Char)