* Bid seen coinciding with Pininfarina shareholder meeting-sources
* Bid should be backed by Pininfarina controlling investor-sources
* Shares extend gains, up more than 3 percent (Adds share reaction, background)
By Stefano Rebaudo
MILAN, April 20 (Reuters) - Indian vehicle maker Mahindra & Mahindra aims to present a formal offer for Pininfarina in time for the Italian car designer's shareholder meeting on April 29, two sources with knowledge of the matter said.
The Indian company's offer is expected to have the backing of Pininfarina's controlling shareholder Pincar -- which has a 76 percent stake in the group famous for designing Ferraris and other luxury cars. However the offer would still need to win the blessing of Pininfarina's creditor banks, the sources said.
Debt-laden Pininfarina, which has a market value of 162 million euros, said on March 26 that Mahindra & Mahindra had expressed an interest in buying it, confirming media reports. Its stock has risen nearly 40 percent since then.
The Indian group on Monday reiterated it had not entered into any agreement that would have a material impact on the company after reports that talks between the two were in the final stages.
A spokesman declined to comment further. Pininfarina had no immediate comment.
A takeover by Mahindra & Mahindra of Pininfarina would be the latest sale of an iconic Italian brand to an Asian investor, following China National Chemical Corp's 7.3 billion-euro deal to buy into tyre-maker Pirelli, announced last month.
The two sources, who spoke on condition of anonymity, said Mahindra & Mahindra wanted to formalise its offer by April 29. The sources said talks between the two sides were ongoing and could still fall apart.
Pininfarina's shares extended gains after the Reuters report, and were up 3.15 percent by 1108 GMT at 5.57 euros.
Pininfarina was founded in 1930 as a niche car manufacturer but that part of the business has been struggling to compete with bigger carmakers and was eventually closed down in 2010.
As a result, the company cut jobs and reinvented itself as a smaller niche design and engineering player. Today it produces only one-off models or very small series.
The group, which has expanded its design work to buildings, interiors, furniture and electronics had a net loss of 1.3 million euros last year. Its net debt stood at 45 million euros at end-2014 and is expected to rise this year.
A tie-up with Pininfarina would add one of the world's most renowned car design names to Mahindra's automaking business. The Indian company is already one of Pininfarina's clients and the two have collaborated on the Halo, a sporty-looking electric car that was on display at the auto show in New Delhi in 2014.
Mahindra has earned a reputation for buying distressed, undervalued companies. In 2010, it bought troubled South Korean automaker SsangYong Motor and last year it acquired a majority stake in France-based Peugeot's loss-making scooter business. (Writing by Silvia Aloisi; Editing by Keith Weir)