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Mitsubishi chief says not talking numbers with Peugeot

The head of Mitsubishi Motors Corp said the Japanese automaker was not discussing any numbers regarding a possible acquisition of a stake by PSA Peugeot Citroen, a day after the partners said they were exploring deeper ties.

“We're not talking numbers, including percentages (of a potential stake),” a Mitsubishi Motors spokesman quoted President Osamu Masuko as telling a small group of reporters upon his return to Japan from the Los Angeles auto show.

France's Peugeot, Europe's second-biggest automaker, and Mitsubishi Motors said on Thursday they were in talks to strengthen an existing relationship, with the Japanese automaker saying a capital alliance was one option.

The Nikkei business daily reported Peugeot could pay up to ¥300 billion ($3.4 billion) for a stake of up to 50%.

A Mitsubishi group source with direct knowledge of the discussions told Reuters, however, that talks had just begun, and that there was as yet no letter of intent (LOI) between the two carmakers.

If Peugeot were to take over the Mitsubishi group's preferred shares in Mitsubishi Motors, the investment would amount to around ¥200 billion to ¥300 billion, the source said.

The source stressed, however, that many hurdles remained, including whether Peugeot would be willing to put up that much capital. A conclusion by the end of this year was unlikely, the source said.

Mitsubishi Motors' top shareholders in the Mitsubishi group are Mitsubishi Heavy Industries, Mitsubishi Corp and Mitsubishi UFJ Financial Group. (Reuters)