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Fiat rises to highest in nearly 2 yrs on Chrysler buyout talk

MILAN, May 28 (Reuters) - Shares in Italian car maker Fiat rose more than 4 percent to a peak since August 2011 on Tuesday as speculation over a deal to buy the 41.5 percent stake it does not already onw in Chrysler continued.

Italian newspapers said on Tuesday negotiations were in a decisive phase and Corriere della Sera said Fiat would unlikely pay less than $3 billion for the stake controlled by the U.S. healthcare trust fund VEBA.

Corriere said a Fiat capital hike would be the best way to raise new resources ahead of a Wall Street listing of the merged group.

By 0729 GMT, the stock was up 4.6 percent at 5.92 euros.