UPDATE 1-Verbund says in strategic talks about Turkey ops

* 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 group Verbund AG is in talks regarding its business in Turkey and is exploring a range of options from scaling back to expanding, it said on Friday.

Sources close to the situation had told Reuters in August that Germany's biggest power company E.ON AG was in talks to expand in Turkey by buying a stake in energy firm Enerjisa from Verbund.

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

It said the object of these discussions was to assess several options, ranging from the sale of a shareholding to the acquisition of further shareholdings - or the further development of an existing investment.

It gave no more details.

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

Enerjisa said last year it had dropped a plan to buy a power distribution network in Istanbul after Verbund backed away from the investment.

E.ON - which had previously said it was talking to potential partners 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 utilities index , which eased 0.2 percent.

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

((christoph.steitz@thomsonreuters.com)(+49 69 7565 1269)(Reuters Messaging: christoph.steitz.thomsonreuters.com@reuters.net))