Trinity Mirror is understood to be in negotiations to buy David Montgomery’s regional newspaper group Local World, according to industry sources.
The Daily Mirror owner paid £14.2m in November 2012 to acquire a 20 per cent stake in Local World when the group was created in 2012 through the merger of Daily Mail & General Trust’s (DMGT’s) regional newspapers and the regional titles of Iliffe News & Media, which owns the Cambridge News.
Local World is headed up by former Trinity Mirror chief executive Montgomery and backed by private equity firms including Odey Asset Management and investment fund Arterfact Group.
Trinity Mirror’s investment in Local World has proved fruitful.
To date, it has received dividends of over £15m from the Local World business, meaning it has already turned a profit on its 20 per cent stake.
Trinity Mirror is now looking to take full control of Local World and is understood to be talking to Montgomery and Local World stakeholders DMGT, which owns a 38.7 per cent stake, and Yattendon Group, the parent company of Iliffe News & Media, which owns a 21.3 per cent share.
However, it is unclear at this stage how willing the stakeholders would be sell their investments in Local World, which is now valued at over £100m.
According to one well placed source, Trinity Mirror is prioritising the purchase of Local World ahead of any deal for Richard Desmond’s Express and Star newspaper titles.
Earlier this week, Trinity Mirror confirmed it was in early stage negotiations evaluating certain assets owned by Desmond.
However, the source said any deal for Desmond’s assets was highly unlikely.
None of the parties would comment on the latest move by Trinity Mirror.
Trinity Mirror currently owns 130 regional titles including the Manchester Evening News and Liverpool Echo, which are not run as part of the Local World business.
Trinity Mirror acquired the Manchester Evening News and the Guardian Media Group’s other regionials newspaper in 2010.