By Pablo Mayo Cerqueiro, Elisa Anzolin and Andres Gonzalez

LONDON/MILAN, March 20 (Reuters) - Gas supplier 2i Rete

Gas aims to sell around 600 million euros ($651 million) of

shares in what would be one of the largest Italian initial

public offerings in Italy in the last 12 months, three sources

familiar with the matter told Reuters.

Italy's second-largest gas distributor and its shareholders

are looking to list at least 30% of the company on the Milan

bourse, subject to market conditions, the sources said.

Including debt, the group could be worth up to 5 billion

euros, but plans are still at an early change and subject to

change, they added. The sources declined to be named as the

discussions remained confidential.

2i Rete Gas is controlled by Italian infrastructure fund F2i

with a 64% stake. Dutch pension fund APG and buyout group Ardian

together hold the remaining 36.1%.

2i Rete Gas, F2i and APG declined to comment. Ardian did not

respond to a request for comment.

Reuters reported last week that 2i Rete Gas had selected BNP

Paribas, Goldman Sachs ( GS ), Intesa Sanpaolo, Mediobanca and

UniCredit to execute the IPO as early as this year.

The group, which competes with Milan-listed Italgas,

reported revenue of 731.6 million euros in 2022 and core

earnings of 502.5 million euros.

The plans come amid hopes that Europe's IPO market may be on

the mend after two years of muted activity.

German perfume retailer Douglas and Swiss skincare group

Galderma are set to price their initial public offerings this

week.

Fashion groups Golden Goose and Puig are also among those

targeting an IPO in the first half of the year, Reuters reported

last month.

($1 = 0.9217 euros)