The bulk of Whyte & Mackay is being sold by United Spirits to satisfy antitrust concerns arising from Diageo's purchase of a controlling stake in the Indian drinks firm. Diageo is already the leader in the UK Scotch market, where Whyte & Mackay's business is centred.

Also expected to move into the second round of bidding is private equity firm Lion Capital, said the sources, who declined to be identified because the process is private.

There are thought to be five parties in the second round, the sources added, but it was not immediately clear who the others were.

Reuters last month reported that SPI Group, owner of Stolichnaya vodka, Italy's Campari and private equity firms Lion Capital and TPG Capital Management were among the interested parties. Other media have reported that KKR was also bidding.

Second-round bids are due on April 17, said the sources.

Representatives for Brown-Forman and Lion Capital declined to comment. United Spirits and Diageo were not immediately available.

Brown-Forman came into the spotlight last week after a financial blog reported that the U.S. maker of Jack Daniel's whiskey was eyeing French cognac maker Remy Cointreau.

In addition to Jack Daniel's, the Louisville, Kentucky-based company owns Southern Comfort and Herradura tequila.

(Editing by Mark Potter)

By Martinne Geller