MADRID/FRANKFURT/MILAN, Nov 19 (Reuters) - German utility RWE is looking at ways to cut its 16.8-billion euro ($19.8 billion) stake in retail business Innogy, several banking sources told Reuters, adding this could involve a deal with Italy's Enel.
RWE said last week there was no need to sell the 76.8 percent stake, given the steady dividend it gets from Innogy's networks, renewables and retail businesses that were carved out last year.
But RWE is still considering scenarios for how it can sell all or parts of it at some point and has held talks with Enel, Europe's largest utility by market value, one of the banking sources said.
RWE is being advised by Bank of America Merrill Lynch on its strategic options, while Enel's advisers include JP Morgan, the people said.
"We have said several times that we are in talks with many participants in the market about many topics. We do not comment on market speculation," a spokeswoman for RWE said.
Innogy, Bank of America Merrill Lynch, Endesa and JP Morgan all declined to comment.
Asked about Innogy, Enel said it regularly received pitches from investment banks as a matter of routine.
"Every time a bank brings us something to look at we receive it. But this does not mean it interests us nor that talks are under way," a spokeswoman for Enel said. ($1 = 0.8480 euros) (Reporting by Andres Gonzalez, Arno Schuetze and Stephen Jewkes; Additional reporting Dasha Afanasieva and Pamela Barbaglia in London, Tom Kaeckenhoff in Duesseldorf and Christoph Steitz in Frankfurt. Editing by Jane Merriman)