UPDATE 1-Denway shares suspended pending statement with parent

* Denway shares down 22 pct since the end of April

* Production resumes after labour dispute at supplier (Adds company statement, analyst comment)

HONG KONG, June 7 (Reuters) - Trading in shares of Denway Motors 0203.HK, a carmaking partner of Japan's Honda Motor (7267.T), was suspended on Monday, triggering speculation that its parent may raise its offer to take the unit private.

The suspension was pending a price-sensitive statement related to the company and its parent Guangzhou Automobile Group Co Ltd, Denway said in a filing to the Hong Kong stock exchange.

"It (the suspension) may be related to a higher offer," said Patrick Yiu, a director at CASH Asset Management. "But Denway is still not on our radar screen as it is not really attractive, especially with the over-capacity concerns in China's auto market."

Guangzhou Automobile, China's sixth-biggest carmaker, announced last month that it planned to issue $3.3 billion in new shares to privatise Denway as part of its own listing.

Shares of Denway have been under pressure, falling about 21 percent since the announcement was made as investors expressed concern over the deal, which overvalued Guangzhou Auto shares, analysts said.

Production at Denway's joint venture auto manufacturing plants was disrupted recently by a salary dispute at one of its parts suppliers in China.

Honda said last Friday that its Chinese auto assembly plants would resume normal operations this week after workers at one of its parts manufacturing plants in China reached an agreement with management to settle their dispute. (Reporting by Alison Leung and Donny Kwok; Editing by Chris Lewis)