RPT-Italy fund, Indian carmaker in race for Aston Martin-source

(Fixes dropped word in last paragraph)

MILAN, Nov 23 (Reuters) - Italian private equity fund

Investindustrial and Indian car maker Mahindra have

made competing bids for 50 percent of British luxury car maker

Aston Martin with a deal expected over the weekend, a source

close to the matter said on Friday.

Investindustrial reached a agreement with Kuwaiti investment

house Investment Dar, which owns Aston Martin, on Thursday but

afterwards Mahindra made a higher counter bid, the source said.

"They are in talks. A deal is expected to be finalised over

the weekend," the source said.

A spokesman for Investment Dar was not immediately available

for comment, nor could Mahindra be reached for comment.

The source said Investindustrial had made a bid worth

between 200 million and 250 million pounds ($400 million) for

the stake and was confident in winning the race because its

proposal was "technically" superior.

It said Investindustrial had agreed a technical partnership

deal with Daimler AG's Mercedes.

Investindustrial, owned by Italy's Bonomi family, is not new

to luxury motor brands. In 2006, it bought Italian motorcycle

maker Ducati and sold it for about 860 million euros last April

to Volkswagen's Audi division.

($1 = 0.6246 British pounds)

(Additional reporting by Amran Abocar in Dubai; Editing by Lisa

Jucca and Leslie Gevirtz)

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