UPDATE 2-Thomson SA denies capital hike talk

(adds comments from broker's note, updates shares)

By Dominique Vidalon

PARIS, July 3 (Reuters) - French media technology group Thomson SA (TMS.PA: Quote, Profile, Research), which has yet to name a new chief executive , on Thursday denied market rumours that it might launch a capital increase.

Fears that Thomson could tap markets to bolster its finances, had dragged its shares to a fresh all-time low of 2.63 euros earlier in the day.

By 1231 GMT, the shares had regained some ground to trade down 0.35 percent at 2.82 euros.

"We're hearing it (the capital increase) could be around 1.5 billion euros ($2.37 billion)," one London-based trader said.

Asked for a reaction, a Thomson spokeswoman said: "The group consistently denies this kind of rumour."

In April Thomson, which faces speculation it might be broken up and is under pressure from poor earnings and an uncertain outlook, said it would suspend its dividend payment for 2007.

The group named a new chairman in April but has yet to find a new chief executive. It has said it would restructure further in the first half of 2008, which will lead to a net loss for the period.