* Talks between Telefonica and Mediaset under way-sources
* Telefonica may buy stake in Mediaset Premium -reports
* Telefonica and Mediaset decline comment
MILAN/MADRID, July 5 Spanish telecoms company
Telefonica is in talks to buy a stake in the Italian
pay-TV business of Silvio Berlusconi's media group Mediaset
, two people familiar with the situation said on
"Talks are underway," one of the sources told Reuters,
adding that no decision had yet been taken. The second source
said a deal could be imminent.
A deal would mark a further expansion of Telefonica into the
pay-TV industry, while giving Mediaset an ally at a time when it
is facing increasing costs for TV rights.
Italian newspapers had said in unsourced reports that
Telefonica could buy a 10 percent stake in Mediaset Premium, the
Italian pay-TV business of Mediaset, for 100 million euros
Telefonica and Mediaset declined to comment on the reports.
Telefonica had on Friday inked a deal with the Spanish arm
of Mediaset that will give it full ownership of Madrid-based
pay-TV firm Distribuidora de Television, known as Canal+.
In December Mediaset announced plans to separate its pay-TV
operations into a new company, indicating it may sell a stake in
the unit to unnamed industrial and financial partners.
Deputy Chairman Pier Silvio Berlusconi, son of the former
Italian prime minister, said earlier this week Mediaset was in
talks with Qatari-owned broadcaster Al Jazeera and other players
to cooperate in the pay-TV business in Italy.
($1 = 0.7331 Euros)
(Reporting by Danilo Masoni and Julien Toyer; Editing by David