PARIS — Shares in Groupe Danone SA, the world's largest dairy products maker and No. 2 bottled water producer, soared yesterday on rumors of a possible bid by U.S.-based PepsiCo Inc.

Both companies would not comment on the likelihood of a bid after shares in Danone jumped as much as 14 percent before settling back to close 10.2 percent higher at 87.60 euros ($104.81), making it the day's biggest gainer in Paris.

PepsiCo spokesman Tod McKenzie repeated the company's July 6 denial of a press report that PepsiCo had acquired 3 percent of Danone, the maker of Dannon yogurt and Evian mineral water, but stopped short of denying that an offer was being considered.

Analysts said speculation was fueled by reports that the French government is taking seriously the "threat" of foreign takeover of Danone.

Finance Minister Thierry Breton has already "taken charge of the case," said Patrick Ollier, the chairman of the French parliament's economic affairs committee, in an interview with LCI television on Monday.

Ollier, a member of President Jacques Chirac's governing Union for a Popular Movement, also said in an interview published yesterday that state-owned bank CDC could be used to fend off any foreign takeover bid for Danone.

A Finance Ministry spokes-man would not comment on Breton's stance toward a possible bid for Danone by PepsiCo, which also makes Fritos chips and Lipton ready-to-drink teas.

PepsiCo shares rose 90 cents to close at $55.54 yesterday on the New York Stock Exchange, near its 52-week high of $57.20.