* Metro shares placed at 35 euros - source
* Otto Beisheim says looking to cut Metro stake further
* Latest in series of placements, capital hikes
* Metro shares down 3.3 percent at 37.14 euros
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FRANKFURT, Oct 7 (Reuters) - Metro co-founder Otto Beisheim raised almost 600 million euros ($880 million) selling shares in the German retail giant, the latest in a string of companies and investors cashing in on the market recovery.
A source close to the transaction said on Wednesday 17 million Metro shares were placed at 35 euros, an 8.8 percent discount to Tuesday's close.
Beisheim's investment holding did not give a price when saying it was to sell a stake of up to 5.2 percent in Metro as part of a move to cut its 18.5 percent stake to about 10 percent to diversify its investment portfolio.
Unicredit, the sole bookrunner for the offering, would not comment.
Metro shares were down 3.3 percent at 37.14 euros at 1000 GMT, while Germany's benchmark DAX index was up 0.2 percent.
Beisheim, 85, recently quit a shareholder pact with the Haniel and Schmidt-Ruthenbeck families, which had together controlled about 66 percent of Metro.
Europe's FTSEurofirst 300 index has rallied more than 50 percent from its lowest level in more than 10 years in March, prompting companies to issue fresh shares to refill coffers drained during the economic crisis.
Investors including Ludwig Merckle, heir to a crumbling business empire that includes generics maker Ratiopharm, have also cashed in on the market recovery.
Merckle's recent sale of shares in HeidelbergCement knocked 1.65 billion euros off his debt. The cement maker itself fetched 2.3 billion euros in a capital increase.
Other companies to have recently turned to the stock market to beef up equity capital include chipmaker Infineon, automotive supplier Leoni, builder Bilfinger Berger and Austrian brick maker Wienerberger. (Reporting by Ludwig Burger, Editing by Michael Shields and Dan Lalor) ($1 = 0.6802 euro)