Italy's Poste eyes acquisition in payments sector - source

MILAN (Reuters) - Italian postal service Poste Italiane is considering expanding its payments operations through the acquisition of card processing and electronic payments group LIS Holding, a person familiar with the matter said on Thursday.

LIS Holding, which controls LIS Pay, is a unit of IGT Lottery, an Italian sub-holding owned by New York-listed International Game Technology, the gaming group controlled by Italy's De Agostini holding company.

A transaction involving LIS Pay would be the latest evidence of robust merger and acquisition activity in the payments sector, which is rapidly consolidating on the back of rising competition and the large investments in technology needed.

LIS Pay has commercial accords in place with Poste and provides top-up services for prepaid debit cards issued by PostePay, the post office's payments unit.

News of Poste Italiane's interest was first reported by Italian daily MF, which said the post office was working with UBS and that the target could be worth 600 million euros.

One banker confirmed LIS Holding could be valued at between 500 million and 700 million euros.

At the end of December, Italy's biggest utility Enel and the country's biggest bank Intesa Sanpaolo teamed up to take control of Mooney in a deal valuing the Italian payments firm at 1.39 billion euros.

(Reporting by Elisa Anzolin; writing by Valentina Za; editing by David Evans)