Mecom, the pan-European newspaper group led by David Montgomery, will use proceeds of a £570 million share issue to cement its position as one of the sector’s largest players.

AIM-listed Mecom will spend €163 million (£111 million) of the cash raised by the issue, which doubles its share capital, to buy a further 75 per cent of Berliner Verlag. The move gives Mecom 90 per cent of the owner of the Berliner Zeitung.

The acquisition was expected to lift Mecom’s pro rata annual revenue to about £1 billion — the same level that Trinity Mirror, which Mr Montgomery previously served as chief executive, achieved last year.

Mecom will also buy 24 per cent of Wegener, of the Netherlands, from Telegraaf Media Groep, the Dutch publisher, for €159 million. Analysts said the deal may lead to a full takeover.

A further £56 million will be used to reduce debt that funded Mecom’s £647 million acquisition of Orkla Media, of Norway, last year. Mecom borrowed heavily to fund the deal, which helped to catapault the company to the top-tier of newspaper groups in Europe by size.

Mr Montgomery, noted as a fierce cost-cutter, is left with a war chest of about £282 million. This will be used for investments “in line with Mecom’s strategy of focusing on markets with fragmented ownership structures and margin improvement potential”, the group said.

As it makes its transition from investment fund to one of the largest newspaper groups in Europe, Mecom is expected to list on the main London market this year.

Mecom’s portfolio includes national and regional papers in Germany, the Netherlands, Denmark, Norway, Poland, Sweden, Ukraine and Lithuania. It has a total production of 25 million papers a week across Europe.

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax