A deal between Mediaset and its second largest Vivendi is now regarded as a possibility.
The two media giants have been embroiled in a long-running legal dispute over the direction of Mediaset’s European expansion.
Reuters confirmed Wednesday the two were working on a potential deal.
The pair had been at loggerheads over Mediaset’s plans for a Dutch-registered company out of which any new ventures would be run.
The French Vivendi has accrued a 29% stake in Mediaset, which the Berlusconi-backed company regards as hostile.
A legal dispute between the two over a collapsed joint venture continues to proceed, though Reuters believes Mediaset might be prepared to let this drop.