(Corrects size of share in first paragrah) By Gwénaëlle Barzic and Mathieu Rosemain PARIS, Oct 4 (Reuters) - French utility Suez on Sunday rejected assurances from rival Veolia that it will not make a hostile bid for the whole company after closing in on a deal to buy a 29.9% stake from power group Engie . Veolia said it would not launch a hostile bid for the remaining shares in Suez and that any bid for the rest of the shares would require approval from Suez's board. Veolia had moved closer to a deal to buy Engie's 29.9% stake in Suez on Wednesday, in a prelude to a full takeover bid and marking a breakthrough after weeks of hostilities between the two utilities. Veolia had removed certain conditions and clauses from the previous outline of its agreement with Engie to persuade the different parties that it would seek a consensual deal. But in a letter from Suez Chairman Philippe Varin to Veolia's boss, which was made public, Varin said the Suez board considered Veolia's approach as hostile. Suez has fiercely rejected Veolia's approach and is supporting a plan by French private equity group Ardian to pull together an alternative bid for Engie's stake in Suez. Veolia has also told Suez it would extend the scope of the assets to be sold to a would-be buyer of Suez's French water activities to include its international water assets. The businesses that could potentially be sold to smooth the way to the Veolia-Suez deal would yield total turnover of 5 billion euros ($5.86 billion), including the 2.2 billion euros generated by Suez's French water business. Veolia has raised its bid to Engie's Suez stake to 3.4 billion euros. The additional guarantees it offered on Sunday to Engie's board will make that acquisition possible, Veolia said in the same statement. French Finance Minister Bruno Le Maire, who has appealed for dialogue, said on Thursday the Suez-Veolia situation was moving in the "right direction." The French state is a major Engie shareholder. ($1 = 0.8537 euros) (Reporting by Mathieu Rosemain, Gwénaëlle Barzic and Sarah White; Editing by Toby Chopra/Barbara Lewis/Jane Merriman)
Our Standards: The Thomson Reuters Trust Principles.