The company was responding to a Fairfax Media report on Monday that Foxtel was close to  taking a 14.9 per cent stake in Ten, which is under pressure to conclude a tortured sale process before it announces half-year results on Thursday.

In a statement to the ASX, the company said it "notes the article in today's Australian Financial Review in relation to its strategic review process".

It added: "That process continues and may or may not result in a transaction which is acceptable to Ten. One component of that process involves discussions with Foxtel about the terms on which it may potentially invest in Ten."

Ten said it would update ASX again when required to do so under its continuous disclosure obligations. "In the meantime, Ten urges caution in dealing in its shares on the basis of media speculation about potential transactions involving the company."

It is believed Foxtel is prepared to inject about $85 million at 18¢ a share into the third-placed metropolitan free-to-air broadcaster, which could seek to raise about $100 million more through a general offer to existing shareholders at the same price.

Ten, whose shows include Masterchef and I'm A Celebrity, Get Me Out of Here!, would need to seek shareholder approval if it issued shares equivalent to more than 15 per cent of its equity.

Ten's existing shareholders include four Australian billionaires: WIN Corporation owner Bruce Gordon, Gina Rinehart's Hancock Prospecting, Crown chairman James Packer and News Corp chairman Lachlan Murdoch. Lazard Asset Management is also a large shareholder.

Third time 

If there is a rights issue, it would be the third time in three years Ten has gone to shareholders with an equity raising. It remains possible no deal will be struck.

JP Morgan expects Ten's first-half results to show a small ratings recovery and a better-than-expected revenue share of about 21 per cent, although it forecasts a 5.5 per cent decline in revenue because of the "lag between any material recovery in ratings and revenue". The broker expects Ten to lose $26 million before interest, tax, depreciation and amortisation for the full year.

Foxtel wants other investors to inject additional cash into Ten Network Holdings if it takes a stake, because it believes it would require more capital to turn Ten around than it could invest under current media regulations, which would restrict its holding to less than 15 per cent.

If Foxtel proceeds with an investment, it would be expected to strike agreements with Ten on television advertising sales and further programming deals. A tie-up between Ten and Foxtel's sales arm MCN would sell more than $1 billion in television advertising, a force that would be taken seriously by rival free-to-air network owners Seven West Media and Nine Entertainment Co.

Mr Gordon, who had made his own alternative proposal to inject $70 million to $100 million in Ten and get two board seats, is understood to have lost interest in the process, which has dragged on for six months.

Foxtel's former bid partner Discovery Communications walked away from the auction in March.

Ten launched a $200 million bid in a three-for-eight entitlement offer in June 2012, which was followed with a heavily discounted $225 million raising six months later.

Shareholders Mr Packer, Mr Murdoch and Mr Gordon also guaranteed a $200 million debt facility in October 2013.

Ten, advised by Citi and Gilbert + Tobin, also fielded offers from Saban Capital and Anchorage Capital Group.