(Reuters) - Trinity Mirror Plc TNI.L, publisher of the Daily Mirror and Sunday Mirror newspapers, is in talks to buy rival Local World Holdings Ltd as it attempts to build scale to help counteract the impact of falling advertising revenue.
In a statement on Monday, Trinity Mirror put no price on the possible deal, which a report in The Sunday Times had valued at close to 200 million pounds ($309 million). The company said there was no certainty a deal could be reached and a further statement would be issued when appropriate.
If the deal goes through, Trinity Mirror would be able to expand the offerings on its automated advertising system, which matches advertising seen on websites to customers browsing those sites, by giving it access to Local World’s regional newspapers.
A deal would also help Trinity Mirror by building scale in local advertising, Liberum analyst Ian Whittaker said in a note to clients. Trinity Mirror and Local World each publish about 100 regional newspapers, according to their websites.
Local World, which declined comment, publishes regional newspapers from Penzance in Cornwall, southwest England, to Grimsby in Lincolnshire in the east of the country.
Shares in Trinity Mirror, which has been cutting costs to protect profit, rose 7 percent to 149 pence by 0900 GMT, still well below their high for the year of 207p set in March.
The move online of both readers and advertising has hurt the revenue of newspaper publishers such as Johnston Press Plc JPR.L and Daily Mail and General Trust Plc (DMGT) (DMGOa.L), as well as Trinity Mirror.
DMGT owns 38.7 percent of Local World, whose chief executive David Montgomery was previously CEO of Trinity Mirror and editor of newspapers Today and the News of the World.
Analysts said a deal between the two would put pressure on Johnston Press, which publishes newspapers such as the Scotsman and the Yorkshire Post, but could come up against regulatory concerns.
Reporting by Mamidipudi Soumithri in Bengaluru; Editing by Anupama Dwivedi and David Holmes