MediasetSpA and VivendiSA could reach a compromise, including a lower valuation ofItalian media group's pay-TV unit Mediaset Premium, inorder to avoid a lengthy legal battle, Telecompaper reported Sept. 22, citingunnamed sources mentioned by MF Online.

Among other options, the companies are also exploring the possibilityof a third investor taking a 20% stake in Mediaset Premium, with Mediaset andVivendi each holding a 40% stake in the pay TV company.

Mediaset and its majority shareholder Fininvest aresuing Vivendi forfailing to honor terms of the original deal, which involves a full takeover ofMediaset Premium.