UPDATE 2-Spain's ACS buys another 4.83 pct of Fenosa

(Adds background, more on law)

MADRID, Jan 8 (Reuters) - Spanish builder ACS (ACS.MC) said on Tuesday it had bought another 4.83 percent of utility Union Fenosa (UNF.MC) for 655 million euros ($962.9 million), but the company denied it was planning a full takeover bid.

ACS now has 45.3 percent of Union Fenosa, ACS said.

Under Spanish law, ACS would be obliged to launch a takeover bid for the rest of Spain's third-largest power company if it purchases another 0.17 percent of its stock, bringing its total purchase to 5 percent, over the next 12 months.

But an ACS spokesman said the company had bought Fenosa shares because they were good value.

"We have no intention of launching a bid," the spokesman said.

ACS paid 44.5 euros per share for its latest stake, compared with a closing price of 44.55 euros for Union Fenosa, up 0.43 percent on the day.

Spain's new takeover law means that in the event of any bid in the next 12 months, ACS, run by flamboyant businessman Florentino Perez, would be obliged to offer at least 44.5 euros per share.

Newspaper El Economista reported last month that ACS was about to raise its stake in Fenosa to ward off any hostile bids for the power company.

ACS also has 11.8 percent of another generator, Iberdrola (IBE.MC), via direct and indirect holdings.

There has long been speculation about a possible merger between Union Fenosa and the much larger Iberdrola, but Iberdrola's chairman Ignacio Galan ruled this out last November, saying competition authorities would not allow it.

ACS shares closed up 1.74 percent at 36.79 euros on Tuesday. (Reporting by Clara Vilar and Jesus Aguado; Editing by Erica Billingham)