UPDATE 1-Hedge funds to buy EDF's UK Eggborough power plant

* Bondholders exercise 104 mln pound right to buy

* EDF planned to sell plant as part of British Energy deal

(updates with confirmation from EDF)

LONDON, Aug 27 (Reuters) - Lenders to Eggborough, a large British coal-fired power station, have exercised an option to acquire the plant, owner EDF (EDF.PA) said on Thursday.

The lenders, which include Bluebay's distressed-debt fund, gained the right to acquire the 1,960 MW station through a restructuring of British Energy, acquired by the French utility at the beginning of 2009.

"EDF confirms that British Energy's lending banks have exercised their option to acquire the Eggborough coal power station under the restructuring agreements made by the British government in 2005," EDF unit EDF Energy said in a statement. The news was earlier reported by the Financial Times.

Eggborough lenders have the option to buy the power station on March 31, 2010, a right that expires at the end of this month.

Bluebay BBAY.L declined to comment.

The option allows lenders to acquire Eggborough for 104 million pounds ($168.6 million) plus a waiver of about 83 million pounds of outstanding debt secured on Eggborough assets, British Energy has said.

EDF agreed with competition authorities it would sell Eggborough when it bought British Energy.

"This transaction is in line with the commitments EDF made to the European Commission, approved in 2009," EDF said.

(Reporting by Tom Freke and Humeyra Pamuk; editing by John Stonestreet)

($1=.6170 Pound)