UPDATE 1-Germany's Metro denies considering sale of Media-Saturn
* Paper quoted exec as saying Metro may sell Media-Saturn
* Metro reject newspaper's interpretation of exec comments
* Comments come amid struggle for control of Media-Saturn
* Metro shares rise 3.6 percent, outperform market (Recasts, adds Metro spokesman and Kellerhals' holding company comment, background)
By Matthias Inverardi
FRANKFURT, July 3 (Reuters) - German retailer Metro AG denied it was considering a sale of its stake in Media-Saturn Holding, Europe's biggest consumer electronics chain, rejecting a newspaper's interpretation of comments by a management board member.
German daily Die Welt said on Thursday that Metro was considering a sale of its stake in Media-Saturn, the world's second-biggest consumer electronics chain after Best Buy Co Inc , to the unit's founder Erich Kellerhals, citing Metro board member Pieter Haas.
However a spokesman for Metro said afterwards: "We merely said that we would by law have to look at any offer."
Metro shares were up 3.6 percent at 33.09 euros at 0903 GMT, making them the top gainers on Germany's mid-cap index, which was up 0.4 pct.
Metro has for years been fighting Kellerhals, who owns 22 percent of Media-Saturn, for control of the business. It has offered to buy him out, while Kellerhals, who has a personal fortune estimated at $4 billion, has himself offered to buy the company back from Metro.
In the past, Metro has said it saw its cash & carry and consumer electronics businesses as having the biggest potential for growth in the long term.
Media-Saturn is currently battling online competition. It saw its sales fall 4 percent in its fiscal second quarter to 4.88 billion euros ($6.66 billion), prompting Metro to cut its full-year earnings forecast for the unit in May.
Analysts have said Metro, which also runs hypermarkets and department stores, could consider floating or selling Media-Saturn but have warned that any divestment would be difficult as long as Kellerhals held a stake in the firm.
The dispute between Metro and Kellerhals has escalated in recent months, prompting the resignation of Media-Saturn CEO Horst Norberg.
Die Welt on Thursday quoted Haas - who is also acting CEO of Media-Saturn - as saying: "If Mr Kellerhals were to present a good offer, Metro's duty to exercise due diligence would require us to examine it."
But he said Kellerhals had not responded to requests for concrete names of possible co-investors and valuation estimates.
A spokesman for Kellerhals' holding company declined to comment.
Metro lifted its holding in Media-Saturn to 78 percent last year when it bought an extra 3 percent stake from co-founder Leopold Stiefel for about 230 million euros, valuing the whole company, which accounts for about a third of Metro's sales, at more than 7 billion euros.
($1 = 0.7331 Euros) (Additional reporting by Marilyn Gerlach and Maria Sheahan; Editing by Pravin Char)