ENEL GREEN POWER SPA 
MILAN (Reuters) - Italy's biggest utility Enel (>> Enel S.p.A.) is looking at ways of strengthening its hold on Enel Green Power (>> Enel Green Power SpA) in a move that could lead to a delisting of the green energy company.
Enel, which owns 69 percent of Enel Green Power (EGP), said on Tuesday it had started to examine the idea of a "corporate integration" of EGP businesses, but did not provide further details.
Taking back full control of EGP would be a way of harnessing the potential of a division Enel sees as a growth engine for the group as well as one of its most cash-generative businesses.
Enel CEO Francesco Starace, a former head of EGP, is banking on green energy to boost profits and dividends over the next five years as margins from traditional generating business in Europe are pressured by weak demand and low power prices.
The state-controlled utility, which has already appointed advisers, said any move on this front would not envisage any kind of tender or exchange offer on EGP shares.
EGP has a market value of 9.3 billion euros (7 billion pounds), according to Thomson Reuters data.
Two sources with knowledge of the matter told Reuters that while discussions were at an early stage the option of taking EGP off the market was firmly on the table.
"The logical upshot would be a delisting of EGP with Enel taking full control," one of the sources said.
A source close to the matter said Enel would take a decision on the operation at a board meeting in mid-November.
The utility is due to release an update to its business plan in November in London.
EGP, one of Europe's biggest green energy companies, was set up by Enel at the end of 2008 before being listed in 2010.
Around 50 percent of Enel's growth investments in coming years are earmarked for renewable energy.
In a note on Tuesday, RBC Capital Markets said EGP traded 15 percent below its 2.20 euros target price, leaving room for an offer to minorities without too much of a premium.
"An acquisition by equity issuance would also not impact Enel's focus on debt," it said.
A utility analyst who asked not to be named said to fund the deal Enel could either issue new shares or use an extraordinary dividend paid by EGP to compensate minority shareholders.
Enel is one of Europe's most indebted utilities but has a strong core earnings generation that has allowed it to shift its focus to growth in areas like smart grids, emerging markets and green power.
EGP, which expects to post core earnings this year of around 1.8 billion euros, is developing a range of green technologies across emerging markets including Latin America and Africa.
(Additional reporting by Alberto Sisto, editing by David Evans and Jane Merriman)
By Stephen Jewkes
