Leonardo DiCaprio and Blake Lively Hang Out in Italy

Blake Lively and Leonardo DiCaprio

Splash News Online

updated 05/17/2011 AT 4:00 PM ET

originally published 05/23/2011 AT 12:55 PM ET

The Cannes Film Festival is over, but Leonardo DiCaprio and Blake Lively continued to hang out together in Europe.

The pair, who were spotted hugging on a yacht on the French Riviera during the festival last week, were seen again looking friendly in Portofino, Italy, on Sunday.

Lively, 23, and the newly single DiCaprio, 36 – both wearing hats and sunglasses – went sightseeing and “seemed happy in each other’s company,” according to an observer. They were “laughing and walking” together.

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