UDPATE 1-Centrica seeking Dutch Oxxio sale, buyers interested

* DONG no longer looking at Oxxio-sources

* Foreign utilities, local competitor interested-sources

* Centrica could fetch up to 240 million euros-sources (Adds DONG, Eni and E.ON no comment, background, details)

By Greg Roumeliotis

AMSTERDAM, Oct 29 (Reuters) - British gas and power utility Centrica (CNA.L) expects to launch a formal competitive process for the sale of its Dutch energy supply unit Oxxio in 2010, with sources familiar with talks saying several parties have expressed interest.

A Centrica spokesman confirmed the sale but declined to comment on any bilateral discussions that the company has held.

"No formal sale process is expected until after Christmas, in the new year," the spokesman said.

Several sources familiar with discussions said Centrica has been talking to parties interested in Oxxio, the fourth-largest energy retailer in the Netherlands, since the summer. Some of the discussions were based on asset swaps, they said.

Denmark's DONG Energy [DOENRY.UL] was looking at Oxxio but will not be making an offer, two people familiar with the matter said. Other utilities interested in the sale include Belgium's Electrabel, Italy's Eni (EN.MI) and Germany's E.ON (EONGn.DE), sources said.

Officials at DONG, Eni and E.ON refused to comment while an Electrabel spokeswoman did not respond to a request for comment.

The rationale behind a non-Dutch utility buying Oxxio would be based on combining an existing power generation business in the Netherlands with an energy retail network, sources said.

Also interested in the sale of Oxxio is privately-owned Dutch competitor Nederlandse Energie Maatschappij, which would be looking to combine its 400,000-strong customer base with Oxxio's 800,000 customers.

Nederlandse Energie Maatschappij has tapped advisory boutique Sequoia, run by former Merill Lynch bankers, to advise on strategic options, which include teaming up with a utility or private equity firm to bid for Oxxio, or launching an IPO for up to 200 million euros ($294.8 million), according to a person close to the firm.

A Nederlandse Energie Maatschappij spokesman declined to comment.

CUSTOMER LOYALTY

Centrica could fetch up to 300 euros per customer for Oxxio, valuing it at 240 million euros ($354 million), but that would depend on a buyer taking a positive view on the loyalty of its customers and its exposure in the wholesale market, sources said.