Trading in shares of Danone are to come under the investigation of the French stock market watchdog, Autorite des Marches Financiers (AMF), following the huge gains the company's stock made on rumours of a potential PepsiCo takeover attempt.

The AMF said yesterday that it had launched a formal investigation.

The French food and drink group has said it will respond to any questions the investigators have.
On Monday (July 25) the AMF said that a French association representing minority shareholders filed a complaint alleging share-price manipulation of Danone's stock.

Meanwhile, PepsiCo continued to refuse to comment on its intentions with regards to Danone.

Speaking to AFP, a PepsiCo spokesperson would only say the company was in full compliance with French takeover regulations.

"When asked by the AMF, we confirmed that we are in compliance with all French laws and regulations. This response speaks for itself," PepsiCo spokesman Mark Dollens told Agence France-Presse.

"PepsiCo has been consistent throughout this matter that we do not comment on rumours," he added, refusing to comment further.