The regional newspaper publisher Newsquest is in exclusive talks with rival Archant about a takeover that would unite the publishers of the North Wales Pioneer and the Eastern Daily Press.
Sky News has learnt that Newsquest, which is itself owned by the US-based publisher Gannett, has seen off competing bidders to secure a period of exclusivity within which to strike a deal.
Archant, which was acquired by the turnaround investor Rcapital in 2020, owns some of Britain’s best-known local newspapers, including London’s Ham & High Express and the Eastern Daily Press.
It began a sale process several weeks ago, and drew interest from the sector’s other big players: Reach, the owner of the Daily Mirror and Daily Express, and National World, which owns JPI Media, another of the local news market’s major publishers.
For Newsquest, a merger with Archant would fill a major geographical gap because of the latter’s big presence in East Anglia, where it is based.
Archant was established in 1845, with the Colman family whose name went on to adorn the famous brand of English mustard one of the company’s founders.
Since Rcapital bought Archant, the company has been restructured, with much of its management team being replaced.
The deal saw Archant requiring support from the Pension Protection Fund, the industry lifeboat, which took a 10% stake in the business.
The value of a transaction was unclear on Monday, although Archant is said to be carrying roughly £8m of debt.
Archant previously owned The New European, which was subsequently sold to a consortium which included the former BBC director-general Mark Thompson and the former Financial Times editor Lionel Barber.
Consolidation among British newspaper publishers has failed to proceed at the expected rate given financial pressures on the industry.
JPI Media, which was formerly known as Johnston Press, went through an insolvency process before being sold to National World, the vehicle established by industry veteran David Montgomery.
Many of the titles published by the likes of Archant and Newsquest have scrapped their print editions and become online-only newspapers in recent years.
Archant has had some success at reinventing itself for a digital age, drawing millions of unique monthly visitors to its titles’ websites.
In 2019, it struck a landmark partnership with Google, the online search giant, to develop a new model for local digital news.
It was unclear on Monday when Rcapital and Newsquest might reach a formal agreement on a deal.
Newsquest’s portfolio also includes the Watford Observer and Wirral Globe.
The American-owned company explored a bid for Archant when it was last on the market, according to reports at the time.
Rcapital declined to comment, while Newsquest could not be reached for comment.