MILAN (Reuters) – Shares in Italian broadcaster Mediaset extended gains on Thursday after further details emerged over a possible peace deal with its second-largest shareholder, French media group Vivendi.

The two companies have been at loggerheads since 2016, when Vivendi walked away from a pay-TV deal and then built a 29% stake in Mediaset, which the Milanese group considers illegitimate.

Shares in Mediaset, which is controlled by the family of former Italian Prime Minister Silvio Berlusconi, rose as much as 4.9%, after surging 8.4% on Wednesday, amid signs the two sides are close to ending their legal battle.

Daily MF said that, as part of the potential deal, Mediaset could decide to pay a 0.3 euro per share dividend on 2020 results, which is not planned at the moment, allowing Vivendi to cash in around 100 million euros ($120 million).

On the other side, the French group would pay up to 25 million euros to end certain pending disputes and agree to sell two thirds of its stake in Mediaset – currently parked in a trust called Simon Fiduciaria – over five years, MF said.

Mediaset and Vivendi declined to comment.

At 0900 GMT, Mediaset shares were up 4.2%.

A Milan-based analyst said an accord with Vivendi would be very positive news for Mediaset shares, as it would help the Italian company pursue a plan for an European merger.

Mediaset is one of the bidders for Bertelsmann’s controlling stake in French group M6, while it is also a minority shareholder in Germany’s ProSiebensat.1 Media.

($1 = 0.8251 euros)

(Reporting by Giulio Piovaccari. Additional reporting by Elvira Pollina. Editing by Mark Potter)