MILAN, Sept 2 (Reuters) - Spain's Telefonica is the frontrunner to acquire Telecom Italia's German unit HanseNet at a price which could be around 1-1.5 billion euros, two sources close to the matter said on Wednesday.
"Talks are continuing, the main point is obviously the price," one of these sources said.
Telecom Italia declined to comment.
In April, Telefonica, Vodafone and United Internet all made bids for HanseNet, this first source said.
On Tuesday, Telefonica's chief operating officer Julio Linares said the group is still interested in the German broadband operator.
"Vodafone made a somewhat low offer," the first source said, adding he believed the UK group's interest might not be so strong.
Vodafone had no immediate comment.
"We have always said we are interested (in HanseNet) but we will not comment on whether we are involved in talks," a spokesman for United Internet said.
Germany's United Internet is buying the DSL unit of Freenet for 123 million euros and "some observers have seen this deal as stepping away from the HanseNet deal," the second source close to the matter said.
A source familiar with HanseNet said there were talks with more than one party ongoing.
HanseNet declined to comment.
PRICE?
Centrobanca analyst Oriana Cardani said her valuation of just below 1 billion euros for HanseNet did not factor in possible synergies for the buyer.
"The market is factoring in a price (for HanseNet) between 1.0 billion and 1.3 billion euros," she added.
A second analyst said he valued the asset between 1.0-1.5 billion euros.
The first source said Telecom Italia's asking price "is at the top end of analysts' expectations."
Telecom Italia would not comment on a newspaper report it was looking for 3 billion euros.
In August Telecom Italia Chief Executive Franco Bernabe said there was a lot of interest in HanseNet, adding a decision would be taken after September. (Reporting by Stefano Rebaudo, additional reporting by Nicola Leske in Berlin and Georgina Prodhan in London, writing by Stephen Jewkes; Editing by Jon Loades-Carter)