Previously, Trinity Mirror and Northern & Shell had been linked over an arrangement whereby Trinity Mirror would take a minority stake in a new company, comprising selected Northern & Shell assets.

This morning (8 September) Trinity Mirror issued a stock exchange announcement outlining a major change in those events. It said: “The board of Trinity Mirror notes that it is now in discussions to acquire 100% of the publishing assets of Northern & Shell and that it has ceased discussions to acquire a minority stake in a new company comprising the publishing assets of Northern & Shell.

“There is no certainty that any transaction will be agreed or completed. Any acquisition would require the approval of Trinity Mirror shareholders.”

Well-known newspaper executive and investor David Montgomery had been linked to the initial, minority stake, deal.   

A source said: “I’m surprised to hear this. The question is what’s happened to the alliance with Montgomery, why has he fallen out of the equation? A deal like this will probably be a challenge for the regulator as well.”

Northern & Shell was founded by its billionaire owner Richard Desmond. Its publishing assets include national newspapers the Daily Express, Sunday Express, Daily Star and Daily Star Sunday. Its magazine titles encompass celebrity weeklies OK!, New! and Star.

It also owns £24.8m turnover newspaper printing operation Westferry Printers in Luton.

The overall group, including other parts of the business such as the Health Lottery, had sales of £241.5m in the year to December 2015. Within that, the publishing and printing operation made up the lion’s share of sales, at £216m, on which it made an operating profit of £1.9m, which became £28.2m after the inclusion of a £26.2m “release of amounts owed to group undertakings”.

Like Trinity Mirror, it also has a substantial deficit in its legacy defined benefit pension schemes, and undertook to pay in £13.6m towards the deficit in the schemes last year.

Northern & Shell’s print suppliers include GD Web Offset and YM Group.

The City appeared to be lukewarm about the news, Trinity Mirror's share price rose by 0.4p to 91.49p following the announcement.