UPDATE 2-Creval investor DGFD urges Credit Agricole to raise bid

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MILAN, April 12 (Reuters) - Creval’s second-biggest investor DGFD on Monday urged Credit Agricole to raise its takeover offer for the Italian bank, increasing the number of shareholders asking for a better price.

The Italian arm of Credit Agricole said in November it would offer 737 million euros ($868 million), or 10.5 euros per share, for Creval to expand in Italy’s consolidating banking sector.

Italy is Credit Agricole’s second-biggest market, behind its home market of France.

The bid started on March 30, but with Creval shares trading well above the offer price hardly any of the company’s capital has been tendered so far.

Creval shares closed up 0.8% at 12.31 euros.

DGFD, a investment vehicle owned by French businessman Denis Dumont, said in an emailed statement it was not against a takeover deal, but “the price offered is not adequate to the current and prospective value of Creval”.

It acknowledged the “seriousness and quality of the current offerer’s parent company”, but said it was also ready to support Creval’s independence should Credit Agricole choose not to raise the price and the bid fails.

DGFD owns around 6% of the Italian bank and its opposition takes the proportion of Creval shares owned by investors who have publicly criticised the offer as too low to 25%.

Creval itself said last month the proposal was a good strategic move, but the price should be at least 23% higher.

Credit Agricole Italia (CAI) first invested in Creval in 2018, when the two lenders struck an insurance partnership.

CAI has said it will keep its Creval stake, which is set to reach 18%, even if the takeover fails.

$1 = 0.8398 euros Reporting by Andrea Mandalà. Editing by Mark Potter