* Chi-X Europe says gets approach from unnamed party
* May sell all or part of its business
* Analysts cite Nasdaq OMX, BATS as potential suitors
* Approach follows LSE's purchase of Turquoise platform
(Adds detail on Nasdaq)
By Douwe Miedema and Alex Chambers
LONDON, Aug 24 (Reuters) - Trading platform Chi-X Europe put itself on the auction block by revealing an approach from a mystery suitor, placing rivals such as Nasdaq OMX and BATS in the spotlight as the sector consolidates.
Chi-X -- the most successful of the low-cost multilateral trading facilities (MTFs) that sprang up after European Union deregulation opened national exchanges to competition in 2007 -- said it could sell all or part of its business.
"Chi-X ... can confirm that it has received an enquiry from a third party, which may or may not lead to an offer for the whole or partial sale of the company," it said in a statement.
"We were not seeking a transaction and the option of remaining independent would allow us to build further value for shareholders," Chi-X Europe said. It gave no further details.
The approach comes eight months after the London Stock Exchange (LSE) swallowed up another upstart MTF, Turquoise.
"This is a totally different beast to Turquoise -- this is the big beast in the MTF field," said Herbie Skeete, managing director of research firm Mondo Visione.
Nasdaq OMX Group is seen by many industry analysts as a potential buyer of Chi-X. The U.S.-based technology exchange has suffered a series of setbacks in its international expansion.
Nasdaq declined comment on any interest in Chi-X Europe, a private company owned by a group of financial institutions which have not disclosed its value.
But a source familiar with the matter said that while Nasdaq had not approached Chi-X, it might get involved in the coming days as a more formal process was launched and bankers would seek to contact further possible bidders.
Chi-X's share of European cash equities trading is more than four times bigger than that of Turquiose. LSE sold separate 3 percent stakes in Turquoise in a deal in March that valued the unit at 33 million pounds ($50.9 million).
"Chi-X is probably close to breaking even and its volumes are healthy. In the hands of a big exchange it could give the LSE an even bigger run for its money," said Skeete.
Chi-X, which generated 2009 trading revenue of 24 million pounds, said that it had become profitable this year.
BIG PLAYERS
Other possible suitors that analyts cite include privately owned BATS, which is the number-two MTF player in Europe, although the platform has previously been touted as a potential target rather than a buyer.
Other prospective candidates are Asian outfit Financial Technologies, Singapore state investor Temasek Holdings and even billionaire financier George Soros, industry observers said.
In the past month, Chi-X overtook NYSE Euronext as the second-biggest European trading platform behind the LSE in all-exchange activity.
According to Thomson Reuters data Chi-X has 15.6 percent of the cash equities trading market versus NYSE's 15 percent. Turquoise has a 3.4 percent share.
The LSE -- which has 24.2 percent of European share trading -- refused to comment, as did German exchange operator Deutsche Boerse, which has 11.8 percent of the market.
But the two incumbents are not bidding for Chi-X, according to two sources, who were each individually familiar with one of the respective bourses' thinking.
Many new entrants have had a hard time becoming profitable, even having gained market share and forcing incumbents such as the LSE and Deutsche Boerse to adapt and cut prices, leading analysts to forecast market consolidation.
Speaking at a Reuters Exchanges and Trading Summit in March, Chi-X Europe Chief Executive Alasdair Haynes forecast that there will ultimately be four or five pan-European market centres dominating share trading within five years.
The owners of Chi-X Europe include BNP Paribas, Citadel, Citigroup, Credit Suisse, Fortis, GETCO Europe, Goldman Sachs, Instinet Holdings, Merrill Lynch, Morgan Stanley, Optiver, Societe Generale and UBS.
($1=.6484 Pound)
(Editing by David Holmes and Michael Shields)