* Metro signals interest in Arcandor's Karstadt stores
* Says to seize opportunities to grow this year
* CEO says 2009 will not be a disaster
* Metro share fall 3 percent
(Adds Karstadt comments, updates share prices)
HANOVER, Germany, May 13 (Reuters) - Metro, the world's fourth-largest retailer, showed interest in Arcandor's Karstadt department stores amid mounting concern that state aid to rival retailers could undercut its position.
As debt-laden Arcandor prepares to seek German government assistance to help counter a severe downturn in demand, Metro has told Berlin it wants to be involved in any talks about a bailout.
"We have no plans to buy Karstadt Warenhaus AG," Metro Chief Executive Eckhard Cordes told the annual shareholders meeting on Wednesday, but added he was keeping a close eye on the situation.
A Metro spokesman said the company had told the government it wanted to get involved in a solution for Karstadt. He floated the idea of creating a new "German Department Store Inc".
Arcandor said last month it planned to close, spin off or restructure its premium department stores and move downmarket to shore up its business.
Metro itself is planning to divest its Kaufhof department stores but Cordes said it was not prepared to sell at any price and could wait until market conditions improve.
Metro shares fell 3 percent to 33.80 euros by 1442 GMT and Arcandor stock retreated 2.5 percent.
Metro declined to give shareholders an outlook for the full year given the economic uncertainties, but said it would seize opportunities to grow.
"I believe 2009 will indeed be a challenging one for our company but that we will also effectively seize and exploit the opportunities arising this year," Cordes said in his speech.
Cordes said the company was in the middle of what it called a fog bank.
"The good news is that we are negotiating our way through it pretty well," he said, adding 2009 "will not be a disaster".
Metro has shied away from giving a detailed 2009 forecast, but has said it expects less dynamic sales and earnings growth this year as the financial crisis spoils consumer demand.
Unemployment in Metro's home markets rose for the sixth consecutive month in April to hit its peak since 2007 while retail sales in Europe's largest economy fell by a more-than-expected 1.5 percent in March.
To weather the economic storm, Metro launched a restructuring programme called Shape 2012 in January which will axe 15,000 jobs and aims to fatten profits by 1.5 billion euros by 2012.
The programme ate into first-quarter earnings, which fell more than analysts had expected. (Reporting by Eva Kuehnen; Editing by Sharon Lindores)