Independent News & Media (IN&M) is expected to be among those bidding for the Northern Ireland newspaper interests of the Trinity Mirror group.
A visit to the Castlemartin home of the company's chief executive, Sir Anthony O'Reilly, at the weekend by Mirror chief executive Ms Sly Bailey set off a wave of market speculation yesterday.
While the company acknowledged that Ms Bailey dined at Castlemartin, a spokesman said Ms Bailey was invited as part of the Independent Waterford Wedgwood Phoenix Stakes race at the Curragh. It is not known whether the issue of the titles was raised by either Mr O'Reilly or Ms Bailey.
The company has, however, indicated it is interested in the titles, although no bid has been submitted at this stage. Market analysts believe that a bid could throw up competition issues for IN&M, which already owns the Belfast Telegraph.
If Independent bought out the Mirror's titles, among them the News Letter, it would own two of the three daily papers circulating in Northern Ireland, with only the traditionally nationalist Irish News outside its control.
However, sources said the company was confident that any competition issues could be addressed. Market analysts said the purchase of assets like the News Letter would make sense, although only if IN&M got the Mirror titles at a good price.
Ms Niamh Brodie, of Merrion Stockbrokers, said IN&M was involved in a balance sheet restructuring that included the disposal of its UK regional titles.
"However, as it already has meaningful operations in Northern Ireland, and if it could overcome any competition issues that might arise, it would likely enjoy meaningful synergies from such an acquisition," she said in a note.
"On balance, while such a purchase would have a strong strategic rationale for IN&M, in our view it would only be a positive for Independent's investment case in the circumstance of such an acquisition being on highly attractive financial terms to the acquirer," she added.
Trinity Mirror owns two newspaper groups in the North: Century Newspapers Ltd and the Derry Journal Group. Century comprises the unionist News Letter, Belfast News and Farming Life.
The Derry Journal Group consists of the Derry Journal, the Donegal Democrat, Letterkenny Listener and the Foyle News. The Mirror used to own the Sunday Business Post but sold it two years ago to Thomas Crosbie Holdings. That group has also expressed interest in the Mirror titles.
Thomas Crosbie Holdings has titles in the North such as the Newry Democrat and the Down Democrat.
Other groups such as the American Gannett Group are also believed to be interested.
The Observer newspaper reported at the weekend that Trinity Mirror recently rebuffed an offer from Candover, a private-equity house, for its national newspaper titles.
The offer was made in the months since the appointment of Ms Bailey. However, it was reportedly turned down by Ms Bailey and her chairman, Mr Victor Blank.
