VOLKSWAGEN AG, Europe's largest car maker, advanced as much as 14 percent in German trading yesterday as investors bet that Porsche SE would seek a full takeover.

Volkswagen rose as much as 34.60 euros (US$50) to 274.78 euros and was up 13 percent yesterday in Frankfurt, valuing the company at 92.2 billion euros.

The stock has gained 32 percent in the past three days after Porsche, maker of the 911 sports car, raised its stake to 35.1 percent on Tuesday and said it had ''de facto" control, according to Bloomberg News.

Porsche, which began buying stock in Volkswagen in 2005 to protect ties to its biggest supplier, reiterated two days ago that it planned to reach a stake exceeding 50 percent in November.

Frank Scholtys, a spokesman for Porsche, said yesterday that the purchase of more than a simple majority "is not under consideration." The sports-car maker said in March that it did not plan to merge the companies.

"The current share-price development shows that the market believes in a full takeover," said Gregor Claussen, a Frankfurt-based Commerzbank AG analyst.

A further increase to above 50 percent was likely to happen around October-November, though a larger holding was "unlikely" because of the probable cost and Volkswagen's shareholder structure, Claussen said.

Stuttgart, German-based Porsche is the biggest investor in Volkswagen, followed by the German state of Lower Saxony with a stake of more than 20 percent.

Volkswagen's supervisory board voted last Friday to retain a company-charter provision giving any investor with 20 percent a blocking vote on major decisions, protecting the state's power over the company. Porsche increased its stake from a holding of more than 30 percent.

Volkswagen's gain over the past three days, and a 7-percent increase in the stock of the car maker's Audi AG unit, has propelled an 8.5-percent increase in the nine-member Bloomberg Europe Autos Index in the period. Other stocks in the index have declined, led by a 5.8-percent drop for PSA Peugeot Citroen and a 5.1-percent slide for Renault SA.

"What we see in Volkswagen shares are to some extent flow effects, triggered by the reduced free float due to Porsche's increased stake," said Albrecht Denninghoff, an analyst at BHF-Bank in Frankfurt.

Porsche advanced as much as 4.74 euros, or 5.9 percent, to 85.26 euros yesterday and was up 5.1 percent in German trading.

The stock, which isn't included in the Bloomberg Europe Autos Index, has gained 0.3 percent since Monday.