Rumours of PepsiCo's interest in buying the French giant Danone are failing to die out. Shares in the French food and drinks group rose again yesterday on the speculation.

"Apparently Pepsico has signed up (investment banks) UBS and Morgan Stanley for the operation," a Paris-based broker was quoted saying by French news agency AFP. "But we don't know where the rumours came from."

Rumours of Pepsi's interest in buying Danone reached a peak in July when the French government threatened to intervene should the group look close to falling into foreign hands.