Murdoch eyes Vivendi's Italy unit

Murdoch: Looking to expand his pay-TV empire in Europe

LONDON, England -- In a move that could ease tensions between two of the world's biggest media groups, Rupert Murdoch's News Corp. says it is considering buying Vivendi Universal's Italian pay-television business.

News Corp., which already co-owns Italian pay-TV operator Stream, said a purchase of Vivendi's Telepiu is one of the options the company is considering for its Italian operations.

The company said it was also looking at turning Stream into an independent business or going ahead with legal action against Vivendi over an earlier merger deal.

"We are in discussions with Vivendi and buying Telepiu is one option," a News Corp. spokeswoman told Reuters.

However, she denied the company had offered Vivendi more than $1.6 billion for Telepiu, as reported by French newspaper Le Figaro. "These are not the figures we are discussing," she said.

Messier: Needs to cut Vivendi's debt

Earlier this month, News Corp. said it would fight Vivendi Universal's decision to abandon plans to merge their Italian pay-TV operations.

Vivendi said it scrapped the deal between loss-making Italian pay-TV unit Telepiu and rival Stream -- jointly owned by News Corp. and Telecom Italia -- after Italian authorities attached conditions to the deal.

The deal called for Telecom Italia to sell its 50 percent stake in Stream to News Corp. Vivendi would then have bought 100 percent of Stream's capital through its Canal Plus unit and combined it with Telepiu.

The merger would have created a single pay-TV group in Italy and end a fierce battle for subscribers which had been financially hurting both Vivendi and News Corp.

The purchase of Telepiu by News Corp. would give Murdoch -- who already operates the UK's dominant pay-TV group British Sky Broadcasting -- a huge inroad into one of Europe's biggest TV markets.

At the same time, the deal would allow Messier to cut his losses in the Italian market and focus on reducing Vivendi's heavy debt load.