2ndUPDATE: Pininfarina Says Still Gathering Expressions Of Interest

Italy's Pininfarina SpA (PINF.MI) declined to comment on a report about Magna International Inc.'s (MG.T) interest in acquiring it, saying it was still gathering expressions of interest from potential buyers.

"The company will make sure to [make an announcement]...the moment when talks reach a level that requires it," the car designer said in a statement.

Pininfarina issued the statement after its stock was halted from trading in Milan. The stock was last quoted up 12.20% at EUR3.22.

The stock rose higher after a report by industry publication Automotive News said Magna was considering acquiring the company, which is best known for its work on a number of models for luxury sports car maker Ferrari, a unit of Fiat SpA (F.MI). It cited three anonymous sources with knowledge of the matter.

Magna, a Canadian-Austrian auto parts maker, declined to comment.

In Toronto, Magna's shares were up 53 Canadian cents, or 1.173%, to C$49.24.

Pininfarina faces financial troubles--it has been looking for a buyer with the help of Italian bank Banca Leonardo for more than a year--its founding family rescheduled the company's debt and agreed to give up its majority stake.

The market has speculated on the likelihood of an offer from French industrialist Vincent Bollore who has said he is willing to do it, if the family ask him. Bollore and Pininfarina already have a joint venture in manufacturing an electric car, which has become Pininfarina's focus as it moves away from its role as a niche manufacturer for car makers like Ford Motor Co (F).

A Bollore spokesperson declined to comment.

Figures published last Friday showed Pininfarina's net loss grew to EUR33.8 million in the first nine months of the year against a net loss of EUR18.1 million a year earlier.

Value of production, which includes net revenue and the impact of stock movements, fell 8% to EUR168.7 million.

Net financial debt reached EUR57.6 million.

David Tyerman, an analyst at Canaccord Genuity, said the segment of the market in which Pininfarina operated had become challenging as car makers bring in-house the kind of work that Pininfarina offers. "The question is: 'Does Magna really need to acquire a niche manufacturer operating in a challenging market?'" Tyerman said.

"Magna Steyr and Pininfarina are the last independent-auto assemblers left," he added. "So the market doesn't have a lot of demand, and do you really want to be bigger in that space?"

A takeover of Pininfarina would mark the loss of independence of another Italian brand in the auto industry in a difficult economic market. Last May, Volkswagen AG (VOW.XE) bought Italdesign-Giugiaro SpA, an industrial designer. In August 2009, Fiat SpA (F.MI) bought Carrozzeria Bertone, another niche manufacturer in Turin.

News website: www.autonews.com

-Gilles Castonguay, Dow Jones Newswires; +39 348 596 5667; gilles.castonguay@dowjones.com

(Stuart Weinberg in Toronto, David Pearson in Paris and Flemming Hansen in Vienna contributed to this article.)

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