* Talks continue between Marine Harvest and Cermaq
* Marine Harvest wanted Cermaq without Peru's Copeinca
* Cermaq board rejected Copeinca acquisition last week (Adds Cermaq CFO quotes, background)
OSLO, May 27 (Reuters) - Norwegian fish farmer Marine Harvest will go ahead with its hostile $1.7 billion bid for local rival Cermaq if current talks with management and key shareholders fail, the company said on Monday.
"If no material progress is made shortly, Marine Harvest intends to immediately launch its original offer of 104 crowns |(a share)," it said in a statement.
"In an attempt to find an amicable solution acceptable to all parties, Marine Harvest has conducted discussion with both selected shareholders and the company.
"These talks have so far not given any conclusion but the parties have agreed to continue the discussions," it said.
Marine Harvest has offered to buy Cermaq for 9.62 billion crowns ($1.7 billion) on condition that it walks away from its own bid for Peruvian fish feed firm Copeinca, an acquisition that would have made Cermaq a pricier target and brought a complexity that Marine Harvest was not prepared to take on.
Both Marine Harvest and Cermaq have said a tie-up makes good industrial sense but differed over the bid for Copeinca and the proposed price, which Cermaq said undervalued the company and gave its shareholders too small a share of potential efficiency gains.
But Cermaq's board failed last week to gain the necessary two-thirds majority support from its own shareholders for the Copeinca acquisition at its annual general meeting, paving the way for Marine Harvest to proceed with its offer.
However the companies then entered talks with a view to resolving their differences.
On Monday Marine Harvest did not say which Cermaq shareholders it was in talks with, although the Norwegian government, which is a key shareholder with 44 percent of Cermaq, had previously rejected Marine Harvest's cash and share offer valued at 104 crowns per share.
"It is too low," Cermaq's chief financial officer reiterated on Monday. "Most of our shareholders share that view."
Valderhaug declined to say what would be a satisfactory offer or how the talks were going.
Marine Harvest's offer includes 52 crowns in cash plus shares in Marine Harvest worth 52 crowns up to a maximum of 8.814 Marine Harvest shares for every Cermaq share, with the offer conditional on Marine winning an acceptance level of above 33.4 per cent of Cermaq. ($1=5.8329 Norwegian krones) (Reporting by Gwladys Fouche and Ole Petter Skonnord; Editing by Greg Mahlich)