Investment group RedBird Capital Partners is in talks with the owners of Italian soccer club AC Milan about a possible deal, emerging as a rival to Bahrain-domiciled fund Investcorp, a source with knowledge of the matter said on Thursday.

RedBird is an investor in Fenway Sports Group, the owner of Liverpool FC and the Boston Red Sox baseball team. RedBird also has a controlling stake in French soccer club Toulouse.

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The source confirmed a report on Britain's Sky News that RedBird had approached U.S. investment group Elliott, the current owners of the seven-times European champions.

Bahrain-domiciled asset manager Investcorp had been in exclusive negotiations with Elliott but has so far failed to clinch a deal and that exclusivity expired at the end of April.

The talks between Investcorp and Elliott, based on a valuation of about 1.18 billion euros ($1.26 billion), including debt, for Milan are still ongoing, a second source said.

Italian soccer clubs have recently become a popular target for overseas investors, attracted by cheaper valuations compared with those of England's Premier league and other rivals in major European championships.

Milan currently lead the Italian league by two points with three games left to play.

Elliott, RedBird and Investcorp declined to comment.