Time Warner and two U.S. private equity funds are on a shortlist of potential buyers for assets belonging to Dogan Yayin , Turkey's biggest media group, sources familiar with the deal said on Wednesday.

Dogan Yayin is also preparing to sell its flagship Hurriyet daily newspaper separately, another source close to the process told Reuters, adding investment bank Goldman Sachs will invite initial bids by February 1.

The starting price for the assets on sale, other than Hurriyet, was expected to be $1.6-$1.8 billion, and U.S. private equity funds KKR and TPG were among the short-listed bidders, sources said.

Dogan Yayin said in a statement to the stock exchange that Goldman Sachs was continuings due diligence with serious non-binding bids, adding the process may not end in a sale.

A Dogan Yayin official declined to comment on plans for Hurriyet's sale.

HURRIYET SHARE SOARS, DOGAN GAIN TOO

International expansion is one of Time Warner's top priorities as it seeks to expand its holdings in emerging regions like Latin America, India, Central and Eastern Europe. Time Warner is already a partner with Dogan in a joint venture which operates CNN Turk news channel.

A Time Warner spokesperson declined to comment.

Dogan Yayin, embroiled in a legal battle against crippling tax fines, said last month that while it was selling media units it would not withdraw from the sector entirely.

Hurriyet shares jumped as much as 15 percent to 2.14 lira and closed 13.4 percent higher at 2.11 lira, with Dogan Yayin shares up 2 percent at 2.03 lira and parent company Dogan Holding up 2.7 percent at 1.16 lira.

In October, Dogan Holding sold its controlling stake in fuel retailer Petrol Ofisi
to Austrian group OMV , its joint venture partner, for 1 billion euros ($1.3 billion).

(With additional reporting by Jennifer Saba in New York. Editing by Simon Cameron-Moore and David Cowell)