PARIS-Orange SA, a major French telecoms company, has held talks about investing in Vivendi's pay-TV unit Canal Plus, according to people familiar with the matter.
No structure for the deal has been decided and the companies might instead agree to a partnership, the sources said. If there is an agreement, there is also no guarantee antitrust regulators would approve it.
On Thursday, Orange CEO Sté phane Richard said he was open to buying Canal Plus.
"If Canal Plus were up for sale tomorrow, Orange would definitely look into it. Obviously," Mr. Richard told reporters on the fringes of a news conference in Morocco on Thursday. "There are many reasons that suggest forging closer ties."
Shares of Vivendi closed up 6.5% at 18.89 euros in Paris, while Orange fell 1.7% to ?13.50.
Paris-based Orange, France's largest telecoms group, has seen margins squeezed at home by years of tough competition and is particularly interested in Canal Plus' businesses in Poland and Africa where both companies have been expanding.
Vivendi, meanwhile, has been looking to foster relationships with large telecoms companies to better distribute its content.
The talks don't involve Vivendi taking a stake in Orange; and Telecom Italia, in which Vivendi holds a stake, isn't part of the discussions, one of the people said.
"If the project is too complicated it reduces the chance of a deal," this person said.
Investors and analysts have long been speculating about a deal between Vivendi and Orange. On Friday, Natixis analyst Jerome Bodin said that investing in Canal Plus could smooth the path for Vivendi to acquire a stake in Orange.
Orange earlier this year failed to negotiate a â,¬10 billion deal for Bouygues Telecom that would have reduced the number of network providers in France to three from four.
A spokeswoman for Orange declined to comment. A Vivendi spokesman also declined to comment.
Write to Nick Kostov at Nick.Kostov@wsj.com