(Corrects last paragraph to show Tengelmann's CEO said he wouldbe interested in buying individual stores just not Praktiker asa whole)
FRANKFURT, July 12 (Reuters) - German home improvementretailer Praktiker's insolvency prompted speculationon Friday that its outlets may be sold to rivals seeking marketshare in Europe's biggest economy, such as Kingfisher orHagebau.
Praktiker, Germany's third-biggest homeimprovement store chain and a household name in the country, filed for insolvency on Thursday after talks with creditorsfailed, sending its shares into freefall and triggering fears ofheavy job losses.
German daily Boersen-Zeitung said on Friday that Britain'sKingfisher, Europe's biggest do-it-yourself retailer, wasinterested in parts of Praktiker, without saying where it gotthe information.
Kingfisher, which is already invested in the German homeimprovement market via a stake in Hornbach, declinedto comment on Thursday whether it was interested in buying anyof Praktiker's outlets.
Meanwhile, Handelsblatt Online quoted the chief of smallerrival Hagebau as saying it could buy some Praktiker stores.
"We are interested in principle," Handelsblatt Online quotedHeribert Gondert as saying.
Praktiker's shares were up 12.3 percent to 0.146 euros by0825 GMT on Friday, after losing 65 percent of their value onThursday.
The company was once worth almost 2 billion euros ($2.6billion), but as its performance slipped in the economicdownturn, its market capitalisation has shrunk to only about 15million euros now.
A Hamburg court on Thursday named lawyer Christopher Seagonas preliminary insolvency administrator, putting him in chargeof drawing up a restructuring plan for Praktiker.
With annual sales of about 3 billion euros, Praktiker isGermany's third biggest home improvement store chain after OBI and Bauhaus and ahead of Hornbach.
Industry leader OBI is not interested in buying Praktiker asa whole but would consider snapping up individual stores, parentcompany Tengelmann's chief Karl-Erivan Haub said on Thursday.
($1 = 0.7668 euros) (Reporting by Maria Sheahan; Additional reporting by NeilMaidment and Alexander Huebner; Editing by Mark Potter)