Vivendi is reported to be mulling a deal to merge France's number-two mobile operator SFR with cable provider Numericable.
Financial Times sources said the French media conglomerate is in highly preliminary discussions with Numericable, as it looks at the options for SFR as part of a more widespread review of its holdings.
The merger proposal would see SFR and Numericable combine as a new entity, with Vivendi holding 49 percent of the company with 51 percent going to the cable company's owners.
In addition to the mobile business, SFR also has a sizable fixed-line operation.
Analyst estimates put the value of SFR at around EUR15 billion, with private-equity owned Numericable worth between EUR4 billion and EUR5 billion. This difference in valuation means a deal would also require a cash payment of at least EUR4 billion to Vivendi.
The telecoms price war in France has hit SFR’s profits and share price in 2012 with Vivendi warning of “drastic” changes at the operator unit in May.
The FT last week suggested that private equity buyers may be interested in SFR. Vodafone has previously been linked to a possible acquisition of the French business, having previously sold a stake in the unit to Vivendi – before the share price collapse.
Vivendi is also considering selling its controlling stake in Maroc Telecom, Morocco’s largest operator, and is working with banks to find a buyer for its GVT fixed-lined business in Brazil.
The company, which also owns Universal Music Group, French pay-TV operator Canal Plus and video games maker Activision Blizzard, saw Jean-Bernard Lévy ousted as CEO in June following disagreements with the board over strategy.