UPDATE 2-Draka pursues both Prysmian deal and Xinmao talks

By Greg Roumeliotis and Antonella Ciancio AMSTERDAM/MILAN, Dec 15 (Reuters) - Dutch cable manufacturer Draka is forging ahead with plans for an agreed takeover by larger Italian peer Prysmian, but said on Wednesday that talks with China's Xinmao Group were continuing. In an advertisement in Dutch financial daily Het Financieele Dagblad, Draka said it would hold a meeting of shareholders in Amsterdam on Jan. 26 with the agenda dominated by Prysmian's 831 million euros ($1.12 billion) cash and share offer. Draka said in a statement that talks with Xinmao and its advisers were continuing, but at this stage there was no certainty that a transaction would be agreed. Xinmao is due to announce by Dec. 20 whether it will proceed with the bid. It has said bank financing for its bid is conditional on it reaching final agreement on a merger protocol with Draka. Prysmian said it would hold its own shareholder meeting on Jan. 21, 22 and 24, with the launch of its offer expected in early January. Prysmian has already won the backing of Draka's management for its offer and has secured the key support of cornerstone shareholder Flint Beheeer, which has a 48.5 percent stake in Draka. Draka is a market leader in telecommunication and data communications wires. Its leading position in optical fibre -- No.1 in China and Europe, and No.4 in the United States -- is what prompted Xinmao to gatecrash Draka's deal with Prysmian. (Reporting by Greg Roumeliotis and Antonella Ciancio; Editing by Hans Peters and Alexander Smith) ($1=.7454 Euro) Keywords: DRAKA/ (greg.roumeliotis@thomsonreuters.com; +31 20 504 5005; Reuters Messaging: greg.roumeliotis.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.

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