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France's Groupe Lactalis SA Tuesday launched a surprise EUR3.375 billion cash bid for the remaining stake in Italy's Parmalat SpA (PLT.MI) that it doesn't already own, aiming to build a global leader in the dairy industry with EUR14 billion in revenue.

Unlisted Lactalis, the biggest dairy group in Europe and the company behind products like President camembert cheese, said it would offer EUR2.60 a share for the remaining 71% stake, a 21% premium over Parmalat's average share price over the past 12 months.

Parmalat's stock jumped 11.42% to EUR2.58 in Milan after a temporary trading halt, as investors began speculating over a possible bidding war for the maker of long-lasting milk and Santal fruit juices.

"After Lactalis' offer, we expect Parmalat to become appealing to speculators again since we don't exclude a counter-offer," broker Banca Imi said in a note.

"Traders are speculating that there will be a counter-offer at EUR2.80 and, at that point, Lactalis could even sell and pull out of the game," an asset manager told MF-Dow Jones.

Lactalis' offer comes as French President Nicolas Sarkozy arrives in Rome Tuesday for a summit meeting with Italian Prime Minister Silvio Berlusconi.

Tensions between the two countries are running high because France insists on controlling its border with Italy to stop North African migrants from crossing it even though they have valid paperwork.

Relations have been tense since March when Lactalis said it had built a 29% stake in Parmalat, raising concerns in Rome that Italian industry was losing its champions to French multinationals. Weeks earlier, French luxury goods giant LVMH Moet Hennessy Louis Vuitton (LVMUY, MC.FR) bought Bulgari SpA (BUL.MI).

Lactalis' announcement Tuesday also comes during a crucial week for Italian bankers, financiers and industrialists as they try to agree on a joint defense of Parmalat.

Italian bank Intesa Sanpaolo SpA (ISP.MI) has been working for weeks to create a consortium with the blessing of the Italian government.

Cassa Depositi e Prestiti SpA, or CDP, a state-owned lender, has also changed its statute to enable it to acquire stakes in companies deemed of strategic importance to the country.

But Centrobanca analyst Simone Ragazzi said it was still unclear whether the CDP and the other potential members of the consortium would put up the money to rival Lactalis' bid.

"We still need to know who is going to put money on the table," he said.

Neither Parmalat nor Intesa Sanpaoo was immediately available to comment on the issue.

When it built up its stake to 29% in March, Lactalis tried to ease Italian concerns by welcoming a partner to help expand Parmalat's business. Tuesday, Lactalis said it would keep Parmalat's headquarters in Italy and could transfer some of its processed-milk business in France and Spain to the Italian group. It also said Parmalat's stock would remain listed.

According to the filing that Lactalis sent to the Italian stock exchange, the French group will seek a EUR3.4 billion loan from a pool of banks including Credit Agricole (ACA.FR), HSBC Holdings PLC (HSBA.LN), Natixis (KN.FR) and Societe Generale (GLE.FR). The four banks signed an agreement with Lactalis on April 25, according to the filing.

Lactalis, owned by the Besnier family, has grown strongly over the last decade through a string of purchases. It has taken over more than a dozen different brands, including the Galbani cheese company of Italy, Lauki of Spain, U.S. company Rondele and the Lubborn creamery in the U.K.

In 2010, it got European Union clearance to buy Puleva Foods, a milk product unit of Spain's Ebro Foods SA for EUR630 million.

Lactalis already has a presence in Italy with Invernizzi cheeses.

But it lacks the kind of presence that Parmalat enjoys oversease in countries like Canada.

In 2009, Lactalis had revenue of EUR8.5 billion.

In 2010, Parmalat's revenue was half that at EUR4.3 billion.

-By Christopher Emsden and Gilles Castonguay, Dow Jones Newswires; +39 02 5821 9908; gilles.castonguay@dowjones.com

(Paolo Longo of MF-Dow Jones and Sabrina Cohen of Dow Jones Newswires in Milan contributed to the article.)

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