MILAN, May 16 (Reuters) - Cdp Reti, the main shareholder

of Italian gas distributor Italgas, is in favour of the

possible acquisition of smaller rival 2i Rete Gas and is

"willing to evaluate forms of support" for the deal, it said in

a statement.

Italgas said on Monday it had started exclusive talks to buy

100% of 2i Rete Gas, a step that would consolidate Italy's gas

distribution market.

"Considering the strategic role of the infrastructure and

energy sectors," Cdp Reti looks "favorably on the possibility of

the transaction, ... recognizing the potential industrial

value," the state-controlled holding company said.

It said it was "willing to evaluate forms of support for ...

the potential transaction," after gathering further information

on the nature of the deal.

In announcing the talks, Italgas said it would cover its

financing needs through a bridge loan guaranteed by JP Morgan

which may be refinanced through equity, debt or "equity-like"

tools, with the aim of maintaining its current rating profile.

However, the announcement triggered a fall in Italgas'

shares on concerns it may resort to a capital increase estimated

at 4-5 billion euros by analysts.