* Deinove in talks with U.S., Brazil firms on biofuels
* Has sugar cane ethanol projects with Tereos Internacional
* Envisages buy-out as soon as 2013
* Shares gain 4.2 percent
(Adds shares, additional details, background)
By Sybille de La Hamaide and Alexandre Boksenbaum-Granier
PARIS, April 5 (Reuters) - French green biotech firm Deinove , which hopes to use a 4 billion year old bacterium to develop the fuel of the future, is eyeing new projects in the United States and Brazil, its chief executive told Reuters.
The company is talks with a large U.S. ethanol maker and with Tereos Internacional, a Brazil-based unit of France's Tereos group, to develop a bioethanol based not only on food but also on a bacterium named deinococcus, discovered in a U.S. corned beef tin in 1956, Deinove CEO Jacques Biton said.
Deinove, which has a market capitalisation of 43 million euros ($61 million), was also negotiating a project in Brazil based on paper pulp, Biton said, but he declined to give further details.
Biton said the company was looking for investors who could provide it with an emergency cash cushion of 1 or 2 million euros and boost development. But he stressed the company, which listed in Paris last year, had enough to last until 2014, when it expects to be profitable.
"What we are looking for are industrial partnerships, and technological, and research, but I would like to have another industrial firm among our shareholders," Biton said in an interview.
He said the firm, created in 2006, which also seeks to apply its technology to antibiotics and green chemistry, could either buy back some of its own shares, take on a new major stakeholder, or even become a takeover target as early as 2013.
"I really think that if we do very well, as soon as 2013 there will be a firm that will want to buy us," he said.
Deinove is controlled by French venture capital fund Truffle Capital, whose stake could fall to 64 percent from 75 percent after some options are exercised. Tereos Internacional, which invested 1 million euros when the company was launched on the Alternext stock exchange in April, has a share of 2.5 percent.
The company's shares were up 4.2 percent at 9.22 euros after Biton's comments to Reuters were made public, bringing the stock's gains to 16 percent since its launch in April 2010. After a poor performance through most of last year it has more than doubled since Jan. 1.
Biton stressed that although Deinove was in talks for a deal, it did not want to rush to sell more biofuel licences and could afford to wait until it further develops its technology.
Deinove is already working with Tereos Internacional on a pilot project due to be launched in 2013 at its wheat-based ethanol plant in France. It is now looking at how to apply the process to Tereos's sugar-cane-based ethanol units in Brazil, Biton said.
The company discovered 7,000 types of deinococchus, dubbed "Conan the Bacterium" for its strength in resisting radioactivity, heat, cold and dehydration, and says it aims to develop "third-generation biofuels" that would go beyond ethanol, which can be corrosive to engines.
"If we want to remain in the race, we need to aim for advanced fuels," Biton said. (Editing by Christian Plumb and Will Waterman) ($1=.7050 Euro)