Italy Police Conducting Company Searches In Parmalat Probe -Source

Italy's tax police are searching the premises of up to eight companies in Milan as part of a probe into possible market rigging related to Groupe Lactalis SA's purchase of a 29% stake in Parmalat SpA (PLT.MI), a person familiar with the case said Wednesday.

Speaking on condition of anonymity, the person told MF-Dow Jones the probe was also looking into possible insider trading.

The person's comments on the searches confirms an earlier news report by domestic news agency Ansa.

Milan's public prosecutor opened an investigation in March after Lactalis built up its stake in its smaller Italian peer over the course of a week.

Lactalis, whose adviser on the offer is French investment bank Societe Generale SA (GLE.FR), has said it had operated correctly in its purchase of the 29% stake.

-By Alessandro Mocenni, MF-Dow Jones; Gilles Castonguay, Dow Jones Newswires; +39 02 5821-9908; gilles.castonguay@dowjones.com

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