Kleinwort Benson has been approaching interested parties on United's behalf about the sale of titles which include the Yorkshire Post. United Provincial Newspapers is the fourth-largest regional newspaper publisher in the UK, with 61 papers in Yorkshire, Lancashire, Surrey and Essex.
Five prominent regional newspaper groups are known to have been approached. These are believed to include Newsquest Media Group, which came to the stock market in October, Trinity International Holdings, the biggest regional press player, Independent Newspapers, Northcliffe Newspapers and Johnston Press. Newsquest, which was formed after Reed Regional Newspapers was sold to a management buyout two years ago, has in the past made public its interest in UPN. However, Jim Brown, chairman, was not available for comment last night.
Industry sources suggested last night that Newsquest could face monopoly problems if it bought UPN. Newsquest operates in areas such as Yorkshire and Lancashire. Some analysts said Trinity would be the favourite buyer, although it too has newspapers in Yorkshire.
In response to calls about the sale, United issued a statement after the market had closed confirming it had "received a number of approaches from third parties indicating their interest in acquiring these businesses". It added: "The board is considering a range of alternatives including the further development of its regional newspaper businesses."
The disposal also includes UPN Espana, the company's Spanish regional paper division, and the free newspapers within United Advertising Publications (UAP). However UAP's flagship title, Exchange & Mart, will be retained by United.
The sale of UPN will be seen as one of the final stages of consolidation in the regional newspaper industry. Trinity kicked off a frenetic round of mergers and acquisitions by snapping up Thomson Regional Newspapers for pounds 327.5m in November 1995. More corporate activity followed with Johnston buying Emap's regional titles, and Newsquest acquiring Westminster Press from Pearson. Most recently, Mirror Group added Midland Independent Newspapers to its newspaper interests, paying pounds 297m in July this year.
United raised pounds 31.5m by selling its Welsh regional papers to Southern Newspapers a year ago. However it reneged on its intention to dispose of its papers in South-east England after the potential buyers failed to meet United's asking price. At the time, City analysts speculated that the rest of the regional newspaper division would eventually go so that Lord Hollick could concentrate on his burgeoning TV businesses. United bought the HTV franchise earlier this year and owns the Anglia and Meridian ITV licences.
The company, which owns the Express newspaper, is also looking at ways of getting into pay-TV.