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UPDATE 1-Verbund says in strategic talks about Turkey ops

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* Says in talks with market participants on Turkey business

* Options range from sale of stake to boosting exposure

* E.ON declines comment

* Verbund shares rose 1.8 pct, lead utilities sector

(Adds quotes and background)

FRANKFURT/VIENNA, Oct 12 (Reuters) - Austrian energy groupVerbund AG is in talks regarding its business inTurkey and is exploring a range of options from scaling back toexpanding, it said on Friday.

Sources close to the situation had told Reuters in Augustthat Germany's biggest power company E.ON AG was intalks to expand in Turkey by buying a stake in energy firmEnerjisa from Verbund.

Verbund, which has been divesting stakes in non-corebusinesses to streamline its portfolio, said in a statement itwas in talks with other companies about the business in Turkey.

It said the object of these discussions was to assessseveral options, ranging from the sale of a shareholding to theacquisition of further shareholdings - or the furtherdevelopment of an existing investment.

It gave no more details.

One source had said in August that there had been talksbetween E.ON and Verbund about an asset swap, under which E.ONcould give up assets in hydro-power stations to Verbund inreturn for its 50 percent stake in Enerjisa.

Enerjisa said last year it had dropped a plan to buy a powerdistribution network in Istanbul after Verbund backed away fromthe investment.

E.ON - which had previously said it was talking to potentialpartners in Turkey - declined comment.

Verbund shares rose 1.8 percent to 17.29 euros by 1120 GMT,making it the leading gainer in the STOXX Europe 300 utilitiesindex , which eased 0.2 percent.

(Reporting by Christoph Steitz, Tom Kaeckenhoff und AngelikaGruber; Editing by David Holmes)

((christoph.steitz@thomsonreuters.com)(+49 69 75651269)(Reuters Messaging:christoph.steitz.thomsonreuters.com@reuters.net))

Keywords: VERBUND TURKEY/