Telefonica said Monday it was in talks with US cable giant Liberty Global to merge its operations in the UK. In a statement to the Spanish stock market, the Madrid-based telecoms operator said it was in "talks with Liberty Global about a possible integration of its respective telecoms businesses in the United Kingdom". It was not "currently possible to guarantee either the specific terms nor the likelihood of success," it said. By 1100 GMT, Telefonica shares were trading 4.00 percent higher, one of the only companies in positive territory on Madrid's blue-chip IBEX 35 index which was down 2.8 percent. At the end of November, Telefonica announced a sweeping restructuring of its activities to focus on its key markets in Spain, Britain, Germany and Brazil while spinning off its Latin American operations through a separate unit. The change in strategy came after a year in which the company posted a sharp fall in net profit of some 66 percent. tpe-hmw/pmr/jh