UPDATE 1-Prudential to sell S.Korea brokerage unit-paper

* Prudential exec met Korea company for possible deal-report

* KB Financial says watching potential targets

SEOUL, Sept 3 (Reuters) - Prudential Financial Inc (PRU.N) put its South Korean brokerage unit up for sale in a deal worth up to $800 million as part of the U.S. group's restructuring, a newspaper reported in its Friday edition.

The Maeil Business Newspaper cited unnamed M&A industry sources as saying Christopher Cooper, who leads Prudential's international investments, had contacted an unidentified South Korean financial service company last month in relation to the possible sale of the unit, Prudential Investment & Securities.

Prudential had picked Deutsche Bank (DBKGn.DE) as lead manager on the sale and wanted to fetch 700 billion won to 1 trillion won ($563 million-$804 million) from the potential deal, the daily reported, without giving a source.

A Prudential Investment spokesman had no immediate comment.

KB Financial Group (105560.KS) (KB.N), parent company of top South Korean lender Kookmin Bank, has been widely tipped as a strong candidate to buy the securities house from Prudential.

An unnamed senior official of KB Financial Group told the newspaper it was looking into Prudential Investment.

KB Financial raised 1.12 trillion won in a rights offering last month and said the proceeds would be used for the acquisition of a bank, securities company or insurer, or towards supporting its subsidiaries.

A KB Financial spokesman said the group has been watching potential targets but no progress had been made.

Applying the current valuation of 2 times estimated book for South Korean brokerages, the possible sale would be worth 840 billion won, based on the unit's net asset price of 420 billion won at the end of July.

The possible deal may spark talk of consolidation in South Korea's crowded and fragmented brokerage market, with most of 61 players relying on stock broking fees. (Reporting by Kim Yeon-hee; Additional reporting by Marie-France Han; Editing by David Holmes) ($1=1243.8 Won)