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UPDATE 1-Shares in Norwegian Air rise after IAG denies report of another offer

Gwladys Fouche and Isla Binnie

offer@ (Adds shares)

OSLO/MADRID, July 5 (Reuters) - Shares in budget carrier Norwegian Air rose on Friday after British Airways and Iberia owner IAG denied a Spanish media report it was preparing another offer for the airline.

The shares were up 7% at 0725 GMT, outperforming a flat Oslo benchmark index after rising as much as 12% at the opening of trading.

"We have said that we are no longer interested in Norwegian several times in the last few months. Nothing has changed," an IAG spokeswoman said.

Spanish news website OKdiario reported late on Thursday that IAG would make an offer for Norwegian within a fortnight, citing anonymous sources.

IAG said in January that it would not bid for Norwegian and planned to sell its 3.93 percent shareholding in the company.

Norwegian subsequently raised 3 billion Norwegian crowns ($351 million) to shore up its finances. Norwegian has shaken up long-haul rivals by offering cut-price transatlantic fares, but its rapid expansion has left it with hefty losses and high debts.

($1 = 8.5382 Norwegian crowns) (Editing by Keith Weir)