David Montgomery is expanding his pan-European newspaper group through a £570 million share issue and the acquisition of Berliner Verlag, owner of the Berliner Zeitung.

Mecom, the former Mirror chief's Aim-listed publishing company, will spend £111 million of the cash raised by the issue, which doubles its existing share capital, to buy up a further 75 per cent of Berliner Verlag.

The German group, which also prints the Financial Times Deutschland, was Mecom's first European newspaper target when it bought a 15 per cent stake in 2005. Mecom plans to buy the remainder of the company.

One of the main sellers will be Veronis Suhler Stevenson, Mecom's private-equity partner in the original deal.

Mecom will also buy 23.9 per cent of Wegener from Telegraaf Media Groep (TMG), the Dutch publisher, for €159 million (£108 million).

Ad Swartjes, the TMG chief executive, said that the group’s plans to extend its stake in Wegener, which publishes regional and free weekly papers, had fallen foul of Dutch competition laws. Mecom's move on the group fuelled speculation that a full takeover from Mr Montgomery will follow.

Another £56 million will be used to pay off part of the debt that funded Mecom's acquisition of Orkla Media of Norway, for £647 million in July. Mecom borrowed heavily to finance that deal, which was also funded through a £170 million placing.

Orka added to a portfolio that includes national and regional papers in Germany, the Netherlands, Denmark, Norway, Poland, Sweden, Ukraine and Lithuania. Mecom now claims to publish about 25 million newspapers a week across Europe, three-times as many as Johnston Press in the UK.

Mr Montgomery, who has a reputation for fierce cost-cutting, said that the remaining money - about £282 million - would be used for further investments in European regional media "in line with Mecom's strategy of focusing on markets with fragmented ownership structures and margin improvement potential."

Shares in Mecom gained 6 per cent, or 4.75p, to close at 84p.

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