The owners of Northcliffe Newspapers are considering putting the company up for sale to achieve more value for shareholders.

The regional newspapers arm of Daily Mail and General Trust is already under review with a cost-saving strategy, Aim Higher, to save millions of pounds.

DMGT’s annual results report says that “significant progress” has been made on Aim Higher and the savings target is now an annual reduction in costs of at least £30m by 2007, £10m more than originally planned. The board says that Northcliffe is outperforming its regional peers.

Bids have been invited from a number of parties.

No decision has been taken on the way ahead and the company says it would only consider a sale if greater shareholder value can be achieved in that way. Any bids would be compared against what DMGT thought the company was worth in terms of profit.

DMGT is seeking to sell Northcliffe as a whole, but any bid by another newspaper company is likely to be scrutinised by the Competition Commission.

A company statement said today: “The board has now identified the potential for further restructuring of the business. Given the strategic importance of Northcliffe within the regional newspaper industry, it has also decided to explore whether greater shareholder value can be achieved through a sale of the business.

“In the event of a sale, the board intends to return a substantial portion of the net proceeds to shareholders, after allowing for continuing our current acquisition and investment programme and maintaining our current credit rating.”

The board has appointed Greenhill & Co International LLP to assist in this process.

A memo from managing director Michael Pelosi said any transaction would not be expected before the end of February.

He added: “In the meantime, it will be business as usual.

“It is vital that readers, advertisers and customers continue to receive the high levels of service which they currently enjoy from Northcliffe’s publications, websites, printing centres and retail outlets.”

The company publishes more than 100 morning, evening and weekly newspapers with a combined circulation of 9m copies.

DMGT enjoyed a record year for the year ending October 2 2005, with adjusted profit before tax of £253m, up eight per cent on last year.

Northcliffe Newspapers achieved operating profits of £102m in 2005, £1m or 1.5 per cent ahead of last year. Advertising grew by two per cent.

The downturn in advertising affected most of Northcliffe’s publishing centres, although Aberdeen saw its profits rise by 18 per cent on the back of a buoyant local economy and Bristol was up by 10 per cent driven by cost savings.