KKR, partner to bid for Dogan Yayin assets: sources

ISTANBUL Tue Feb 1, 2011 10:06am EST

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ISTANBUL (Reuters) - Private equity fund KKR (KKR.N) has agreed with a Turkish partner to bid for assets belonging to Turkey's biggest media group Dogan Yayin (DYHOL.IS), sources familiar with the deal told Reuters on Tuesday.

"KKR has recently cemented a partnership with a major Turkish group in bidding to acquire Dogan's media assets," a banker close to deal said, without naming the Turkish group. "The identity of the Turkish group when disclosed to us was frankly earth-shaking," he said.

Pragma Corporate Finance is advising the partnership between KKR and the Turkish partner, the banker said. Pragma declined to comment when contacted by Reuters.

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

"I heard about the deal between KKR and a local group," another source close to the deal said, also without naming the company.

KKR, Time Warner (TWX.N) and U.S. private equity fund Texas Pacific Group TPG.UL are among the shortlisted bidders and will have a month to put their final binding offers on the table, the banker said.

Dogan Yayin (DYHOL.IS) shares reacted with a more than 4 percent jump to 2.08 lira.

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

Dogan Yayin said last month that Goldman Sachs was continuing due diligence with "serious" non-binding bids, adding the process may not end in a sale.

Turkish Tax authorities have imposed some 4 billion lira ($2.51 billion) in back taxes and fines on the company. In legal challenges brought by Dogan, courts have ruled against it to the tune of 2.52 billion lira.

In October, parent Dogan Holding (DOHOL.IS) sold its controlling stake in fuel retailer Petrol Ofisi (PTOFS.IS) to Austrian group OMV (OMVV.VI), its joint venture partner, for 1 billion euros ($1.37 billion).

Time Warner is already a partner with Dogan in a joint venture which operates CNN Turk news channel. 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.

(Editing by Will Waterman and David Cowell)

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