UPDATE 2-Valeo sees signs of end to car part destocking

* Signs automakers' destocking is ending

* Keeps gloomy FY outlook

* Will look at acquisition opportunities

* Share up five percent

(Adds details, comments on acquisitions, background)

By Helen Massy-Beresford

PARIS, June 9 (Reuters) - French car parts maker Valeo (VLOF.PA) said there were signs that destocking by carmakers was coming to an end but confirmed a gloomy outlook for 2009 amid an unprecedented industry crisis.

"We are noticing a convergence between the level of production and that of sales, marking the probable end of destocking by carmakers," new CEO Jacques Aschenbroich told the company's annual shareholders' meeting in Paris on Tuesday.

He confirmed the group's previous forecast of a 30 percent drop in the market in the first half, and a 20 percent drop for the year as a whole.

Valeo shares jumped over five percent and closed up 4.38 percent for a gain this year of 25 percent, giving it a market capitalisation of 1.035 billion euros ($1.44 billion).

According to I/B/E/S, analysts are expecting Valeo to post full-year sales of 7.3 billion euros, down eight percent, and an EBIT operating loss of some 80 million euros with a net loss of 165 million.

Aschenbroich said government scrapping incentives -- which offer drivers cash bonuses for trading in old cars for newer, greener models -- had a positive impact in March, while some emerging markets, including China and Brazil, showed signs of holding up in the face of the crisis.

Aschenbroich reiterated the group would divest certain non-strategic activities as and when market conditions allowed.

Valeo would also look at acquisition opportunities, he said, adding that there would be "no taboos" in terms of size of any possible target, although the company would not have the financial resources for a large purchase on the order of a billion or two billion euros by itself.

However, he was confident the board would support seeking financing in the event of a good opportunity, he said.

Asked if he was interested in the assets of U.S.-based Delphi DPHIQ.PK, Aschenbroich confirmed that there were "one or two things that could interest us", but declined to specify which assets.

Valeo's biggest single shareholder, Pardus, has long campaigned for Valeo to take on assets from Delphi or Visteon VSTN.PK in which it also has a large stake. Former chairman and chief executive Thierry Morin fought this.

FIRST QUARTER SALES DOWN

The group posted a 33.4 percent drop in first-quarter sales in April, and pledged to step up cost-cutting plans. [ID:nLO176593]

Fellow French car parts maker Faurecia (EPED.PA) saw sales plunge 38 percent in the first quarter.[ID:nLL520067]

Valeo's AGM was marked by controversy as shareholders followed a supervisory recommendation to vote against the awarding of a "golden parachute" to Morin, who left in March following "strategic differences".

Valeo has since launched legal proceedings, after recording equipment was found in its boardroom. [ID:nLI628362]

The company will have to try to recover the 3.2 million euro payout which has already been handed over to Morin. [ID:nLO211801] (Editing by Marcel Michelson and Jason Neely)