* Swiss operator Six submitted highest Borsa bid -sources
* Euronext and Deutsche Boerse have also made bids
* Bids value Borsa at 3.5-4 billion euros -sources
* LSE selling as part of Refinitiv bid antitrust remedy
(Adds context, financial details)
By Elvira Pollina, Pamela Barbaglia and Francesca Landini
MILAN/LONDON, Sept 14 (Reuters) - Switzerland's Six has made the highest bid in the battle for Borsa Italiana, ahead of France's Euronext ENX.PA and Deutsche Boerse DB1Gn.DE , two sources familiar with the matter said.
The indicative bids valued the Milan stock exchange operator at around 3.5 billion euros to 4 billion euros ($4.15-$4.74 billion), one of the sources said, with Six leading the race.
The London Stock Exchange (LSE) LSE.L , which took control of Borsa in 2007 for 1.6 billion euros, is now trying to sell it as part of the regulatory remedies to clear its $27 billion acquisition of data provider Refinitiv.
Refinitiv is 45% owned by Thomson Reuters TRI.N TRI.TO , which is the parent company of Reuters News.
The move has put Borsa Italiana at the centre of another shake-up in the European exchange sector after Six became Europe's third-largest operator by revenue this year following its 2.57 billion euro takeover of Spanish rival BME.
LSE and Six declined to comment.
The bids are still non-binding and will need to go through an in-depth review by the LSE, a third source said.
"It's too early to draw conclusions. Execution remains a key factor, it's not just about price," this source said, pointing to possible interference from Rome, where politicians want to retain a say over Borsa's strategy and management.
Another source said Six is open to discussing its governance with Italian authorities and is looking to use BME's takeover as a blueprint for the deal.
But it has no plans to team up with an Italian or eurozone partner since its offer is fully funded, the source added.
DIGITAL UPGRADE
Six, which reported 7.260 billion Swiss francs in cash and cash equivalents in the first six months of the year, has offered to invest in the digital upgrade of Borsa as part of its bid, a fifth source said, adding Borsa would face less pressure as part of an unlisted group.
French exchange Euronext said on Monday it had submitted a non-binding offer and was teaming up with Italy's Cassa Depositi e Prestiti (CDP) CDP.UL and Intesa Sanpaolo ISP.MI .
But unlike Six, Euronext would need to raise cash as its balance sheet is more stretched, Jefferies analysts said.
Euronext told investors during its second quarter results that its liquidity, including an undrawn revolving credit facility, stood at 1 billion euros.
Rome is keen to see Euronext prevail and Italian Finance Minister Roberto Gualtieri met privately with the French exchange's boss Stephane Boujnah in Rome last week. Deutsche Boerse has also bid for Borsa as it seeks to expand across Europe after failing to merge with the LSE in 2017. Boerse said last year that it had 2 billion euros available for mergers and acquisitions.