Oct 22 (Reuters) - Barclays ( JJCTF ) has re-entered

negotiations with Brookfield Asset Management ( BAM ) about a

deal to sell a stake in its British merchant payments business

to the Canadian asset manager, Sky News reported on Tuesday.

A deal would make Brookfield a majority stakeholder in

Barclays' ( JJCTF ) merchant payments business, while providing the

capital needed to fund the unit's growth, the Sky News report

said, adding the valuation was unclear.

Barclay's, Britain's third-biggest bank, had initially hoped

to value the business at more than 2 billion pounds ($2.5

billion) but found it difficult to sell a stake at that price,

Reuters had reported.

Brookfield, which manages assets worth more than $825

billion, was one of the firms that dropped out of bidding in

recent months, mainly due to the price, Reuters had reported.

Brookfield declined to comment on the Sky News report while

Barclays ( JJCTF ) did not immediately respond to a request for comment.