UPDATE 2-Credit Agricole rights issue oversubscribed

(Adds comments from Agricole CEO, fund manager, background)

By Sudip Kar-Gupta and Marcel Michelson

PARIS, July 1 (Reuters) - French bank Credit Agricole (CAGR.PA: Quote, Profile, Research) said its deeply discounted 5.9 billion euro ($9.3 billion) rights issue was oversubscribed and said takeovers in the battered sector are unlikely as share prices slide.

Bank shares fell sharply across Europe on Tuesday, led by Swiss group UBS (UBSN.VX: Quote, Profile, Research) and Agricole said its capital increase had been all the more significant given the climate.

"The success of this capital increase is all the more notable given the fact that it has taken place in a particularly difficult market environment," Chief Executive Georges Pauget said in a statement.

The company's majority shareholders, which are French regional agricultural banks, own 54.39 percent and subscribed their part. The rest of the offer was subscribed by more than 130 percent.

Last month, Agricole said it was offering one new share for every three existing shares at 10.6 euros a share.

The price was below the 16.60 euros level at which Credit Agricole made its Paris stock market debut in December 2001.

It was also below an anticipated 13 to 14 euros and compares with the bank's share price of 21 euros on May 12 -- a day before it unveiled plans for the cash call.