French media conglomerate Vivendi is looking to possibly acquire pay-TV group Sky in a move to build a pan-European entertainment giant.

According to Reuters, three sources familiar with the matter have said that Vivendi is turning its attention to Sky following a review of smaller pay-TV targets in Turkey and other fast-growing markets in Europe.

Rupert Murdoch-owned Sky has a market value of $26bn but could cost Vivendi as much as $41bn including debt, according to the sources.

The deal would bring together two powerful businessmen: Rupert Murdoch, whose Twenty-First Century Fox owns 39% of Sky and Vivendi’s chairman and largest shareholder, Vincent Bollore.

“Ultimately what determines a deal is Vincent Bollore,” one of the sources said.

However, Vivendi is not thought to have approached the boards and management of Sky or Fox yet, and the Telegraph has reported that Vivendi has “firmly denied” the takeover. But this hasn’t stopped shares in Sky rising by 3% to $15.73 on Wednesday following the reports.

Vivendi started off as a water company but now owns major media labels such as pay-TV group Canal+ and Universal Music.