UniCredit seen picking talks partner for Pioneer end-Sept-sources

* All Pioneer valued at up to 2.7 bln euros - source

* Santander, CVC Capital consortium front runners - source

* UniCredit (Milan: UCG.MI - news) aims to keep a "substantial stake" in Pioneer (Adds detail, background)

LONDON/MILAN, Sept 17 (Reuters) - UniCredit, Italy's biggest bank by assets, is expected to pick a partner for exclusive talks to buy a stake of up to 50 percent in its asset management division Pioneer towards the end of September, two sources familiar with the matter said.

The sources said on Wednesday Spanish bank Santander and a consortium comprising private equity fund CVC (Taiwan OTC: 4744.TWO - news) Capital Partners and Singapore sovereign fund GIC were the two strongest contenders, even though U.S. fund Advent was also in the frame.

Like other Italian and European lenders, UniCredit has been shedding assets, cutting jobs and closing branches to shore up its capital base ahead of a health check of euro zone banks whose outcome is set to be made public next month.

The bids on UniCredit's table are for a stake of up to 50 percent in Pioneer, sources have said.

At least one of the proposals values the whole of Pioneer at around 2.4-2.7 billion euros ($3.11-3.5 billion), or 9-10 times EBITDA of 270 million euros, one of the sources said.

The bank had initially been expected to pick a preferred bidder for exclusive talks at the end of last week, but the decision is now seen in the week following UniCredit's Sept. 23 board meeting, the sources said.

The proposal by CVC and GIC, who are advised by Deutsche Bank, aims to boost Pioneer's expansion across the United States, Europe and Asia and make the asset manager less reliant on UniCredit, according to one of the sources.

The source said that Santander's proposal envisaged a merger between its own asset management operations with Pioneer's.

A second source said Santander was UniCredit's favourite candidate because of its expertise in asset management.

UniCredit had in 2011 considered the sale of Pioneer but dropped the idea after failing to conclude a tie-up with Eurizon, the fund management arm of domestic rival Intesa Sanpaolo.

In August UniCredit CEO Federico Ghizzoni said Pioneer was a strategic asset and the idea was to keep a "substantial stake". (1 US dollar = 0.7719 euro) (Reporting by Pamela Barbaglia and Gianluca Semeraro, writing by Silvia Aloisi; editing by Susan Thomas)