* WIN may bid for Nine if deregulation goes ahead
* Industry seen as ripe for M&A activity
* WIN owner already has a stake in Ten Network (Recasts, adds quotes from government, WIN and expert)
By Byron Kaye
SYDNEY, Oct 20 (Reuters) - Australian regional broadcaster WIN Corp will buy a stake in metro network Nine Entertainment Co Holdings Ltd NEC.AX , Nine said, as the industry prepares for a possible shake-up of ownership rules that could spark a series of mergers.
The deal to buy 13 percent of Nine would give privately-held WIN's billionaire owner, Bruce Gordon, major holdings in two of Australia's three national free-to-air networks, as he already has 14.9 percent of Ten Network Holdings Ltd TEN.AX .
This would put him in a strong position in any takeover talks should the government of new Prime Minister Malcolm Turnbull overhaul pre-internet ownership rules and allow TV companies to become more dominant in single markets. Reform is currently under review and Turnbull has previously backed deregulation.
"It's positioning, to build on that if and when the rules change, and there's every indication the government is going to move on it," said Ben Goldsmith, a media researcher at Queensland University of Technology.
"The thinking has always been ... that the metros would buy the regionals, but this sounds like the other way around."
WIN will buy its Nine stake from U.S. private equity firm Apollo Global Management, which along with Oaktree Capital Group bought the broadcaster in two deals in 2006 and 2008 before selling down in a 2013 listing.
In a statement, Nine, which has a A$1.4 billion ($1.02 billion) market value, confirmed the sale without disclosing a price. Its shares have traded below their A$2.05 issue price since June this year, and were down 1 percent at A$1.60, in line with the broader market.
A WIN spokesman was not immediately available for comment.
Australian free-to-air networks have been calling for an end to strict ownership rules designed to preserve a variety of voices, as audiences switch to online services like Netflix NFLX.O .
But governments have been reluctant to act amid opposition from News Corp NWSA.O executive chairman Rupert Murdoch, who owns newspapers in all of Australia's major cities.
That is expected to change under Turnbull, who lobbied for deregulation as communications minister before taking over as prime minister from Tony Abbott in a party-room vote last month.
A government spokeswoman said consultations about possible industry reform were ongoing. ($1 = 1.3774 Australian dollars)