REFILE-UPDATE 2-GM in talks to sell truck ops to Isuzu-media

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By Yumiko Nishitani

TOKYO, Sept 19 (Reuters) - General Motors Corp (GM.N) is in talks to sell its midsize-truck operations to Isuzu Motors (7202.T), a newspaper reported, but Japan's No. 2 truck maker said it had received no such offer.

Shares in Isuzu, a former GM affiliate, extended gains to end up 11 percent after the report.

GM was expected to sell its midsize-truck operations, which constitutes most of its truck business, for several tens of billion of yen and Isuzu has told the U.S. automaker it would consider an offer positively, the Nikkei business daily said.

It was unclear whether GM would sell all of its operations or retain a Michigan plant, the paper said.

But Isuzu spokeswoman Yukiko Okazaki said GM had not contacted the company about such a deal. "We will begin studying an offer if we receive one," she said.

Last month, Navistar International Corp (NAV.N) said a tentative agreement struck late last year to buy GM's medium-duty truck business had expired without a deal due to significant marketplace and economic changes.

If GM were to sell its truck operations to Isuzu, it would be an ironic turn of events as GM has in the past extended lifelines to the Japanese truck maker in which it once held as much as 49 percent after first taking 34 percent in 1971.

GM has lost more than $51 billion in the past three years and has been further hurt by the recent downturn in U.S. auto sales. It has said it will try to raise up to $4 billion through asset sales and has put its Hummer division up for sale.

The Nikkei also said Isuzu might also raise its stake in DMAX Ltd., a diesel-engine joint venture in Ohio, from a current 40 percent. GM holds the remaining 60 percent.

Isuzu's Okazaki said the two firms were not considering changes to DMAX's ownership.

Isuzu's shares ended up 10.5 percent at 336 yen, outperforming a 3.8 percent rise in the Nikkei benchmark average .N225. (Editing by Edwina Gibbs)