Valeo denies in stake sale talks with Hinduja

PARIS (Reuters) - French car parts maker Valeo (VLOF.PA: Quote, Profile, Research) denied on Monday a media report saying that it was in talks with India's Hinduja Group over the sale of a controlling stake in the company.

The Business Standard reported on Monday that executives from Hinduja, which controls India's No. 2 bus and truck maker Ashok Leyland Ltd (ASOK.BO: Quote, Profile, Research), met the top team at Valeo in Paris last week, citing a source familiar with the development.

The French company said in a statement on Monday: "Following information published in the Indian press, Valeo denies being in talks with Hinduja Group over the sale of a stake in Valeo."

A spokesman for the Hinduja Group said the report was "speculative."

Valeo shares, which had risen by as much as 4.4 percent on the report, trimmed gains following the denial. At 1107 GMT, the stock was up 3.1 percent.

Valeo, Europe's third-biggest car parts maker, has said it plans to divest assets with about 2 billion euros ($3.2 billion) in sales by the end of 2008, including the sale of its wiring harness unit last year, and acquire new assets on the same scale.

(Reporting by Blaise Robinson; additional reporting by Rina Chandran in Mumbai, editing by Elizabeth Fullerton)