DEALTALK-Intesa SP could scrap Fideuram sale, go for IPO

* Exor cash short, cen bank frowns on takeovers using debt

* Listing most likely in early 2010

* Shedding unit part of bank's plans to raise capital

* Listing would be big icebreaker for frozen Italy IPO mkt

By Ian Simpson

MILAN, Oct 23 (Reuters) - Italy's biggest retail bank Intesa Sanpaolo SpA (ISP.MI) could be tempted to scrap trying to sell fund manager Banca Fideuram and list it instead, with analysts valuing it at 2.5 billion to 3.5 billion euros ($5.25 billion).

Exor SpA (EXOR.MI), the holding company for Italy's Agnelli family, says it is interested in Fideuram. But Exor, the main shareholder in automaker Fiat SpA (FIA.MI), has only a billion euros in cash and the Bank of Italy frowns on banks being bought using debt. Talks are making slow progress.

That could mean the option of an initial public offering (IPO) gains traction for Intesa Sanpaolo, with a listing most likely in the first part of next year in order to take advantage of positive markets, a banking source and an analyst said.

Shedding Fideuram, a leading Italian asset manager with 4,300 private bankers, is part of Chief Executive Corrado Passera's programme to get rid of about 11 billion euros of non-core assets and bolster capital ratios. They are now towards the low end among large European banks.

The bank snubbed state aid aimed at boosting its capital ratios last month and issued a 1.5 billion euro hybrid bond. [ID:nLT598096]

"With the markets currently very positive, an IPO for Fideuram probably gets more likely every day," said an investment banker specialising in Italian banks.

"An IPO takes a while to prepare. They could be planning now for launching early-mid next year."

A source close to the deal said the bank "has been looking at an IPO from the beginning."

A financial source also said Intesa Sanpaolo was keeping all its options open, with no determination yet on how much of Fideuram could be sold or listed.

"However, an IPO would in theory let them free themselves up on the balance sheet and deconsolidate Fideuram," said the source.