(Adds details, background and share price)
MILAN, May 21 (Reuters) - Japan's Hitachi is ready to buy U.S. fund Elliott's stake in Ansaldo STS to take full control of the Italian rail-signalling company, the head of Hitachi Rail said on Monday.
Hitachi and investment funds led by Elliot have been feuding since the Japanese company took a majority stake in Ansaldo STS, with the funds complaining about the price paid in the public offer by Hitachi, as well as Ansaldo's strategy and governance.
Elliott is the second largest shareholder in Ansaldo with a potential interest of just over 31 percent. Hitachi holds a 50.77 percent stake in the group.
"We are ready to buy Elliott's shares in Ansaldo STS, but at a fair price. Our target remains to reach a 100 percent stake," Hitachi Rail CEO and Ansaldo Chairman Alistair Dormer told Corriere's L'Economia, in comments confirmed by a spokesman.
Elliott was not immediately available for comment.
Shares in Ansaldo were up 1.64 pct on the Milan market at 0916 GMT.
In October, Dormer had said Hitachi was happy with its stake at Ansaldo and was not planning to increase it.
Owned by U.S. hedge fund manager Paul Singer, Elliott is an outspoken investor in many European and U.S. companies.
This month, it succeeded in wrestling a board majority at Telecom Italia from France's Vivendi.
Last year, it rescued former Italian prime minister Silvio Berlusconi's deal to sell his prized soccer club AC Milan, granting a 300 million euro funding to the Chinese investors who were struggling to complete the transaction. (Reporting by Stefano Rebaudo; Editing by Giulia Segreti and Mark Potter)