UPDATE 1-Widex denies talks with GN on hearing aids

(Adds Widex denial)

COPENHAGEN, Aug 31 (Reuters) - Unlisted Danish hearing aid maker Widex on Friday rejected speculation it was in talks with headset maker GN Store Nord (GN.CO: Quote, Profile, Research, Stock Buzz) and its hearing aid arm Resound over a potential merger. Shares in GN rose as much as 7 percent on Friday on speculation the companies were in talks, but lost some positive ground once Widex had denied the rumour.

"We haven't been in talks and are very surprised over the rumours we were to buy Resound," Widex Sales and Marketing Chief Tom Westermann told Reuters.

GN declined to comment on the speculation.

"There are rumours in the market that Widex is in talks with Resound. Widex has said earlier that it is not interested in Resound, but apparently the market believes the rumours," said Jyske Bank trader Morten Byrdal.

By 1140 GMT the share price was 4.4 percent higher at 53.25 crowns, outperforming the Copenhagen bourse's top-20 OMX index , which was 1 percent up. Earlier this month, Swiss competitor Sonova (SOON.S: Quote, Profile, Research, Stock Buzz) called off its planned $2.8 billion takeover of Resound after a German court upheld a move from anti-trust authorities to block the deal.

GN has said it expects to own Resound throughout 2007 but has said it will pursue all possible strategic options for the arm, and concentrate instead on its headset activities.

((Reporting by Teis Jensen, editing by Greg Mahlich; tel Copenhagen newsroom +45 33 96 96 51, kim.mclaughlin@reuters.com)) Keywords: GN SHARE/

(C) Reuters 2007. All rights reserved. Republication or redistribution ofReuters content, including by caching, framing or similar means, is expresslyprohibited without the prior written consent of Reuters. Reuters and the Reuterssphere logo are registered trademarks and trademarks of the Reuters group ofcompanies around the world.nL31723044.NORD