UPDATE 2-France's TF1 in talks to buy TV assets from AB

* TF1 CEO says not in talks about TF1 International sale

* TF1 CEO does not rule out new bond issue (Recasts with CEO, CFO quotes from AGM)

By Dominique Vidalon

PARIS, April 17 (Reuters) - France's leading television broadcaster TF1 (TFFP.PA), which is in talks to buy assets from French media group AB, is not ruling out launching a new bond issue if and when market conditions permit it.

Chief Executive Nonce Paolini told Reuters on the sidelines of the group's annual shareholders meeting that TF1 was not discussing with group AB nor another company the sale of broadcasting rights unit TF1 International.

French media newsletter Ecran Total said on Tuesday that TF1 was discussing the purchase of TF1 International with AB.

Paolini would not comment on first quarter advertising sales trends at TF1, telling Reuters: "You can well imagine that in the current climate, advertising revenue cannot be good".

TF1 has so far given no guidance for 2009 advertising revenue at its flagship TF1 channel which last year fell 4.1 percent.

In February, TF1 predicted that consolidated revenue would fall by 9 percent in 2009 as a global economic crisis weighed on advertising spending and household consumption.

Paolini repeated that prediction on Friday, stressing it was a "mere assumption".

Before the AGM, TF1 issued a statement to say it had not yet reached an agreement on the purchase of assets from French media group AB. Paolini told shareholders he would not provide further details on the talks with AB.

Last month, Le Figaro reported that TF1 was in final talks to acquire control of free-to-air digital terrestrial channels TMC and NT1 from AB group.

TF1 already owns 33.5 percent of AB group and the two companies each own 40 percent of TMC channel.

The deal would give TF1 a stronger foothold in the digital terrestrial market at a time when its audience is declining as it faces heightened competition from the Internet and digital terrestrial channels.

In 2008, TF1's audience share fell by 3.5 percentage point to 27.2 percent for individuals aged four years and over, and by 4 percentage point to 30.9 percent for women under 50.

Paolini also said that TF1 had no plans to make acquisitions abroad but that he could not rule out buying back shares.

Chief Financial Officer Philippe Denery said the group's financial situation was "healthy" with a gearing of 51.2 percent and secured credit lines of 1.310 billion euros.

Asked if TF1 could in the future launch a new bond issue, Paolini said:" At this stage a new bond issue cannot be ruled out, depending on market conditions,"

By 1216 GMT, TF1 shares were up 6.49 percent at 7.89 euros while those of domestic peer M6 (MMTP.PA) were up 7.89 percent at 14.35 euros.

AB Groupe is majority-owned by Claude Berda who founded AB Productions with Jean-Luc Azoulay in 1977 until a seperation of the two partners in 1999. (Reporting by Dominique Vidalon, editing by Marcel Michelson and David Cowell)