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By Andrea Mandala and Stephen Jewkes
MILAN, April 2 (Reuters) - U.S. fund Varde Partners has pulled out of the bidding for troubled Italian bank Carige , a source said on Tuesday, leaving a specialist fund run by BlackRock as the only potential buyer still known to be considering a bid.
The Genoa-based bank was placed under special administration by the European Central Bank (ECB) in January after its top investor blocked a planned capital raising and potential bidders now have until mid-April to submit binding offers.
Under emergency measures approved in January following the ECB's move, the Italian government stands ready to inject up to 1 billion euros ($1.1 billion) in capital into Carige by end-September should a private sector solution fall through.
The source said Varde had decided to walk away after due diligence showed a deal was not a good investment opportunity for the Minnesota-based fund, which has invested in soured Italian bank loans in recent years.
BlackRock Italy Executive Chairman Andrea Vigano declined to comment on a possible offer for Carige on Monday.
He said the asset manager would never make a proprietary investment in a bank, but it assessed several opportunities to invest its clients' money through specialist funds.
A second source familiar with the matter said on Tuesday a BlackRock specialist fund was still studying an offer with a view to relaunching Carige and making it more competitive.
This source said a final decision had not been taken yet, adding that tight deadlines made things difficult.
Based in the port city of Genoa, Carige has been laid low by years of mismanagement and its exposure to the local economy, which was badly hit by Italy's worst post-war recession and a global slump in the shipping industry. ($1 = 0.8929 euros) (Reporting by Andrea Mandala and Stephen Jewkes, editing by Alexander Smith)