, the Spanish media company, is expected to sell Digital+ later this year. The service was originally in the sights of Rupert Murdoch's News Corporation, which is a shareholder in Sky.
However, News Corp's simultaneous pursuit of German pay-TV group Premiere has raised questions over the funds available to expand its footprint across western Europe.
The talks are still at early stages with any moves to purchase not expected to start in earnest until September. Meanwhile, it is not yet clear how BSkyB plans to finance the deal. As of March 31, it had net debt of £1.91bn and had generated £614m in cash from operations in the first nine months of the year.
Both companies could also find themselves facing stiff competition from other potential bidders, which are expected to include Vivendi, Telefonica, ONO and Orange.
BSkyB will also be cautious. Its last overseas purchase was in 2000 when it bought a minority stake of Kirch Media, a German pay-TV platform. The move proved ill-fated, resulting in a write-off of over £1bn in debt two years later.
Grupo Prisa is expected to sell Digital+ to repay debts incurred from a highly priced buyout earlier this year of shareholders in Sogecable, a leading Spanish TV company.
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