Updates with EDF declines to comment in paragraph 5

By Elvira Pollina and Francesca Landini

MILAN, Oct 21 (Reuters) - French utility EDF has picked Intesa Sanpaolo IMI ISP.MI and Lazard LAZ.N as financial advisers to study strategic options for its Italian subsidiary Edison EDNn.MI, two sources familiar with the matter told Reuters on Tuesday.

Under the leadership of new CEO Bernard Fontana, state-owned EDF has started reviewing its assets as it seeks to raise money to meet government demands for investments in new nuclear reactors.

EDF is considering an initial public offering or bringing on board a financial sponsor or selling a stake in Edison, sources have previously told Reuters, with one of the people saying EDF would keep a majority holding in the unit in any deal.

Edison could be worth between 7 billion and 10 billion euros ($8 billion-$12 billion), sources have said.

EDF, Lazard, Intesa and Edison declined to comment.

Italian daily Il Sole 24 Ore reported on Tuesday that Intesa and Lazard were in pole position to become EDF's advisers.

In September, Edison CEO Nicola Monti said the Italian group was ready to list on the Milan bourse should its parent company decide to press ahead with such a plan.

Edison already has the corporate structure in place and procedures necessary for its stock to trade publicly.

When it acquired full control of Edison and took it private in 2012, EDF kept Edison's savings shares listed in Milan.

These are a special class of shares that offer a higher dividend than ordinary shares but do not give holders voting rights at shareholder meetings.

Edison reported revenue of 15.4 billion euros and a core profit of 1.7 billion euros last year.

($1 = 0.8575 euros)

(Reporting by Elvira Pollina and Francesca Landini in Milan, Additional reporting by Forrest Crellin in Paris; editing by Susan Fenton)

((elvira.pollina@thomsonreuters.com;))