UPDATE 1-Endesa launches sale of Spanish gas network-sources

* Endesa sends teasers out to interested parties-sources

* Financial investors express interest-sources

* Endesa shares close down 1.1 percent

(Adds detail, background, shares)

By Greg Roumeliotis and Tracy Rucinski

AMSTERDAM/MADRID, April 22 (Reuters) - Endesa (ELE.MC) has launched the sale of its Spanish gas distribution and transmission network, a disposal that could fetch up to 760 million euros ($1.02 billion), several people familiar with the matter said.

The Spanish utility, 92 percent owned by Italy's Enel (ENEI.MI), sent out teasers to interested parties this week and plans to send more details to potential bidders in the next two weeks, sources said.

Enel, Europe's most indebted utility, is looking to cut debt by nearly 6 billion euros to 45 billion by the end of 2010. It is merging the renewable assets of Endesa with those of its Enel Green Power (EGP) unit, ahead of an initial public offering of EGP that could raise at least 4 billion euros. [ID:nLDE62H07D]

Endesa's Spanish gas assets have some 397,000 connection points and made 2009 earnings before interest, tax, depreciation and amortisation (EBITDA) of 58.4 million euros, two people familiar with the matter said.

Industry sources suggested Endesa could get between 10 to 13 times EBITDA for the assets, implying a valuation of between 584 and 760 million euros. Endesa is hoping to complete the process this summer, sources said.

Macquarie (MQG.AX), CVC Capital Partners and Prudential's (PRU.L) M&G Investments are among the financial investors considering a bid, sources close to them said.

AXA (AXAF.PA) Private Equity told Reuters in March it was preparing a bid together with Italian investment fund F2i. [ID:nLDE62T1VX]

Endesa declined to comment. Macquarie declined to comment, CVC did not respond to a request for comment, while a spokesman for M&G confirmed its interest in the asset.

REGULATED ASSETS

Endesa's network, which comprises 4,050 kilometres of gas distribution tubes and 859 kilometres of gas transport tubes covering several Spanish regions including Aragon, will appeal more to financial rather than trade buyers, sources said.

"The regulatory framework in Spain for gas transportation is on a regulated asset base system while distribution is also regulated and linked to distributed volumes," said one infrastructure banker. "All this appeals to infrastructure funds more than utilities, which are usually after end customers."

Endesa's shares closed down 1.12 percent while Enel's shares closed flat.

The last major sale of gas distribution assets to be completed in Spain was Gas Natural's (GAS.MC) sale of 2,394 kilometres of gas distribution tubes and 465 kilometres of transport pipelines to Portugal's EDP (EDP.LS) for 330 million euros in December 2009.

Gas Natural is also awaiting clearance to sell its gas distribution business in Madrid with 412,000 clients to Morgan Stanley's (MS.N) infrastructure fund and Portugal's Galp (GALP.LS) for 800 million euros.

A source close to Morgan Stanley said its infrastructure fund would not bid for Endesa's gas assets. A Morgan Stanley spokesman declined to comment.

Endesa's gas holding company distributes natural gas through its various stakes in regional companies, some of which are minority shareholdings, making the sale more complex, sources said. ($1=.7439 Euro) (Editing by David Cowell and Jon Loades-Carter)