(Adds share price reaction, fund manager comment)
FRANKFURT, July 23 (Reuters) - Shares in German truck and engineering group MAN skidded on Wednesday after its chief was quoted as saying the firm did not want to part with its truck business, dampening speculation of a takeover.
"We have no intention to sell the commercial vehicles unit," Chief Executive Rudolf Rupprecht told Focus Money weekly in a summary of an article due to appear on Thursday. "Building commercial vehicles is our core business and we want to make it even stronger."
Sources told Reuters earlier this month German carmaker Volkswagen was interested in MAN's trucks and had held preliminary talks with the company, but that no firm negotiations were underway.
"There has been contact with VW about a possible cooperation in the commercial vehicles sector," Rupprecht told Focus Money. "There have also been talks with other manufacturers."
MAN shares on Wednesday unwound some of a 14 percent gain chalked up on takeover speculation, and were down 3.7 percent at 17.19 euros by 0945 GMT, making it the biggest decliner on a flat blue-chip German DAX index .
"For the moment, the (takeover) story has been deflated," said Michael Punzet, analyst at Landesbank Rheinland-Pfalz. "I am sure it will resurface during the year."
Consolidation in the truck sector is widely expected to kick off when Sweden's Volvo , the world's second-biggest truck maker, sells its 45 percent stake in rival Scania , which it has to do by early next year for regulatory reasons.
VW currently offers only small and medium-sized trucks in the European market, alongside its range of cars, and has said it would be interested in expanding its commercial vehicles business to include larger vehicles, such as those made by MAN.
But analysts say a deal between VW and MAN would seem to make more sense for MAN, which makes marine diesel engines, plant equipment, printing machinery and space rocket components as well as tucks and buses, than for VW.
They say VW would find few synergies between the cars it makes and trucks. However, the market still held some hope for a deal.
"(The sale of the truck unit) could still go ahead because he (Rupprecht) is under pressure from the firm's economic underperformance," said Trudbert Merkel, a fund manager at DEKA. "The point is that MAN is undervalued as a conglomerate and is worth more on a basis of its parts."
He said he still took an overweight stance on the firm, based on hopes they would improve growth in 2003 and 2004, benefiting from an expected economic recovery.
A MAN spokesperson was not immediately available to comment.
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(Additional reporting by Hakan Ersen in Frankfurt)