JOHNSTON PRESS and Trinity Mirror, the newspaper groups, both hinted yesterday that they are keen to make separate break-up bids for Daily Mail and General Trust’s £1.2 billion local newspaper arm.

Their declarations came on the day that Viscount Rothermere’s DMGT surprised competitors by putting the group’s Northcliffe Newspapers, owner of titles such as the Aberdeen Press & Journal and the Bristol Evening Post, up for sale.

Tim Bowdler, the chief executive of Johnston, said: “As an acquisitive group, you would expect us to follow developments closely.”

A spokesman for Trinity Mirror said that it was watching the situation “with great interest”.

However, both companies, and the other remaining local newspaper group, Gannett’s Newsquest, would be unable to buy all Northcliffe for competition reasons, meaning that they would sell some titles on. That could leave venture capitalists better placed, and all major British and American names with a track record in media — including KKR, Apax Partners, Candover Investments and 3i — are likely to be interested in what is likely to be an open auction.

Peter Williams, the finance director of DMGT, said: “Northcliffe is still producing lower returns than our peers, although we are normally long-term investors. Our rivals can afford to pay more for acquisitions, because their returns are higher. We have better opportunities in exhibitions and information publishing.”

Northcliffe made £102 million of operating profits last year, and the business has been valued at £1.2 billion to £1.5 billion. DMGT will pay some of the sale proceeds to shareholders, and Lord Rothermere would receive a quarter of any special dividend— a possible payment of £150 million.

Any buyer is likely to want to improve Northcliffe’s 20 per cent profit margin, meaning that jobs are at risk. Trinity Mirror’s margin for its regional papers is 28 per cent. Johnston Press’s margin is at 36 per cent.

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