Adds share price reaction in paragraph 4

By Christoph Steitz and Francesca Landini

FRANKFURT/MILAN, June 19 (Reuters) - German renewable project developer PNE PNEGn.DE could fetch more than €1 billion ($1.2 billion) in a sale, three people familiar with the matter said, as a deadline for indicative bids draws closer.

Indicative bids are due June 22, two of the people said.

The deadline comes as Morgan Stanley MS.N, PNE's biggest shareholder, seeks to cash in on its stake after a previous sale effort ended without success.

Shares in PNE rose as much as 10% on the news to their highest level in more than eight months and were still 3% higher at 1500 GMT.

KEY DETAILS

• PNE is 50.06% owned by Morgan Stanley MS.N, which sources said last year was working with Goldman Sachs GS.N to explore a sale. Other shareholders were also prepared to sell, sources have said.

• A €1 billion valuation would represent a premium of around 20% to Thursday's closing price.

• Under German stock market rules, buying 30% or more in a listed entity triggers a mandatory takeover bid for all shares.

• PNE has a 21.7 gigawatt pipeline of wind and solar projects, with more than half in core markets Germany, France and Poland.

• Companies that have looked at PNE in the past include Switzerland's Partners Group PGHN.S, two of the people said, and Canada's CPPIB, one of them said, adding it was unclear whether they would bid.

• PNE, Morgan Stanley, CPPIB, Goldman Sachs and Partners Group declined to comment.

($1 = 0.8694 euros)