Orange denies media report on deal with Vivendi on Telecom Italia

August 24, 2016 1:05 PM EDT

Telecom Italia new logo is seen at the headquarter in Rozzano neighbourhood of Milan, Italy, May 25, 2016. REUTERS/Stefano Rellandini

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PARIS (Reuters) - French telecoms operator Orange denied on Wednesday having reached a deal with Vivendi that would include taking stakes in the media giant's pay-TV Canal Plus and in Telecom Italia, following an online report by French magazine Challenges.

Rumours of a potential deal between Vivendi, which owns 24.7 percent of Telecom Italia, and Orange, have regularly surfaced over the past few months as traditional media groups try to find new ways to compete against newcomers such as Netflix and Amazon.

"Orange obviously discusses with all content players in a sector that is constantly evolving, but the group formally denies having reached any secret deal with Vivendi including Canal Plus and Telecom Italia," a spokesman for Orange said by phone.

Vivendi has pledged to secure partnerships with telecom groups to increase the distribution of its content while former monopoly Orange, which focuses on providing high-speed Internet and telecoms services, faces newer competition at home from SFR Group, which offers customers its own TV media content, including English Premier League soccer.

Challenges, without citing any sources, reported that Orange had reached a secret deal with Vivendi under which the telecoms operator would buy up to 20 percent of Vivendi's pay-TV Canal Plus. Separately, Orange would also get shares of Telecom Italia currently owned by Vivendi, Challenges said.

A spokesman for Vivendi declined to comment on the Challenges report.

(Reporting by Mathieu Rosemain; Editing by Susan Fenton)

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