Deutsche ups stake in Springer to 8.4 pct

* Private equity Hellman & Friedman pays off loan with stake

* Hellman & Friedman left with 1.6 percent stake

(Adds comments, background, share price)

FRANKFURT (Reuters) - Private equity firm Hellman & Friedman used a majority of its almost 10 percent stake in Axel Springer (SPRGn.DE) to pay off a loan it held with Deutsche Bank (DBKGn.DE).

Springer, publisher of Europe's best-selling tabloid Bild and majority owned by the Axel Springer society, said that as of Dec 15 the bank's stake amounted to 8.35 percent, worth around 123 million euros at current share prices. U.S.-based Hellman & Friedman is left with a 1.6 percent voting stake.

Springer said Deutsche Bank, which described the deal as a purely financial investment, plans to sell the stake once market conditions have improved.

Springer shares were worth 44.349 euros at closing on Monday and up 3.26 percent at 44.65 euros at 1437 GMT on Wednesday.

Hellman & Friedman paid 350 million euros ($503.2 million) for the stake or 54 euros per share in 2003.

It had acquired the stake from Deutsche, Germany's biggest bank, which had seized a 40 percent stake in Springer in 2002 after the former owner, insolvent media group Kirch, defaulted on a 720 million euro loan.

Deutsche Bank had helped Hellman & Friedman finance the deal, giving the U.S. firm the option to repay in cash or shares.

Deutsche also sold 10.4 percent for around 170 million euros to Friede Springer, the widow of Springer's founder Axel Springer that year.

At the end of 2003, Springer concluded a share buyback through which it acquired the remaining stake held by Deutsche Bank.

Hellman & Friedman had said in 2003 it planned to float the

stake in five to seven years. It halved its share in 2006.

(Reporting by Nicola Leske; Editing by Jon Loades-Carter)