THE parent company of the 'Daily Mail' has spun out its regional newspaper business in a deal which is being seen as a key test of the health of the regional newspaper market.
Daily Mail and General Trust ( DMGT) sold its Northcliffe Media division to Local World, a newly formed media group owned in part by Trinity Mirror, DMGT itself and Yattendon Group, another local newspaper company.
DMGT will receive some £52m (€64m) for the titles, and will have a 38pc holding in the new company, while Trinity Mirror will own 20pc of the company.
A number of institutional investors are also involved in Local World.
In a statement yesterday, DMGT said Local World will control 107 print titles and 60 websites.
DMGT will contribute more than 80 titles to the new venture, with another 36 coming from the Yattendon Group.
The new company will have a combined weekly audience of six million print readers and seven million online.
The success or otherwise of the new company will be closely watched by media analysts. Northcliffe has been fighting a shrinking customer base and had been a drag on DMGT for some time.
This is the latest shake-up in the local and regional newspaper market. Johnston Press, which owns more than 100 titles between the UK and Ireland, has laid off dozens of staff and cut the circulation of several newspapers in a bid to shore up the company.
Northcliffe chief executive Steve Auckland, who will head the new firm, said Local World would be a "comprehensive local content provider".
"The new company will be well-resourced, entrepreneurial and able to respond quickly to the differing requirements of local communities," he added.
Shares in DMGT were up marginally by the close in London, at 474 pence. The company reports preliminary results today.