Mediaset's board to discuss possible deal with Vivendi on Friday-sources

MILAN, Nov 28 (Reuters) - The board of Italian broadcaster Mediaset will meet on Friday to discuss a possible deal with the group’s second biggest shareholder, France’s Vivendi , two sources close to the matter said on Thursday.

A deal would end a three-year long legal stand-off and allow Mediaset to press ahead with plans to create a pan-European TV champion through the merger of its Italian and Spanish units into a Dutch holding company called MediaForEurope (MFE).

Earlier, sources said the two sides were close to reaching an agreement that would see the French group sell a 20% stake in the Italian company to the MFE holding.

Vivendi, led by billionaire Vincent Bollore, holds an overall stake of 29% in Mediaset, which is controlled by the family of former prime minister Silvio Berlusconi.

Reporting by Elvira Pollina, editing by Silvia Aloisi