* Doughty bought Spain's no. 2 bus firm in 2006
* Expansion says business could be worth 900 million euros
(Updates with confirmation from Doughty Hanson)
By Andres Gonzalez and Quentin Webb
MADRID/LONDON, March 24 British private equity group Doughty Hanson [DOUHA.UL] signalled it was considering a sale or flotation of its Spanish bus firm Avanza Group and had hired JP Morgan (JPM.N) as an adviser.
"Doughty Hanson has chosen JPMorgan to lead a strategic review of the options available to Avanza," a spokesman for the buyout firm said.
The group is looking at a sale, a flotation or a refinancing of Avanza, which it bought in 2006, two people familiar with the matter said earlier on Thursday.
Avanza is Spain's second-largest bus company after Alsa, owned by Britain's National Express (NEX.L).
Newspaper Expansion, which earlier reported JPMorgan's hiring, said Avanza could be worth about 900 million euros ($1.3 billion).
In a sale, potential bidders could include strategic rivals such as Deutsche Bahn [DBN.UL] unit Arriva, Stagecoach (SGC.L) and National Express, as well as private equity firms such as CVC [CVC.UL], Carlyle [CYL.UL], Bridgepoint, Apax, Advent International, Permira [PERM.UL] and Blackstone (BX.N), Expansion said.
Avanza and JPMorgan declined to comment. (Reporting by Andres Gonzalez in Madrid and Quentin Webb in London; Writing by Elizabeth O'Leary; Editing by Will Waterman) ($1=.7109 Euro)