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The giant private equity firm Apollo Global Management is the front-runner in negotiations to buy most of the assets of Digital First Media, the nation's second-largest newspaper company by circulation and publisher of The Detroit News, according to reports Monday.

Apollo, which has about $160 billion under management, is "in advanced talks" to acquire DFM for around $400 million, Reuters reported, citing sources.

Apollo and the smaller private equity firm Cerberus Capital Management have been reported to be the two final bidders for the chain, which was put up for sale last September. Apollo was founded in 1990 and is headquartered in New York City. It describes itself as "contrarian, value-oriented investors in private equity, credit and real estate, with significant distressed expertise." It manages portfolios of investments for institutional investors, sovereign wealth funds and endowments.

There was no immediate comment from Apollo, Cerberus or Digital First Media.

Digital First publishes 76 daily newspaper and 160 weekly publications. Its dailies include the Denver Post, San Jose Mercury News and St. Paul Pioneer Press, and in Michigan, the Mount Pleasant Sun, Macomb Daily, Royal Oak Tribune, Oakland Press, the Heritage newspapers and affiliated weekly publications.

The negotiations are ongoing and could still "fall apart," the sources told Reuters.

Some assets generating $25 million in earnings are excluded from the sale, but those assets were not identified, the wire service said.

It was not immediately clear whether the proposed sale includes The News.

News Publisher and Editor Jonathan Wolman said the ongoing sale process has made no impact on the operations of The News. The News functions under a Joint Operating Agreement with the Gannett Co. whose Michigan.com subsidiary handles business, production and administrative responsibilities for both The News and the Detroit Free Press.

Ken Doctor, a newspaper analyst with Outsell, said he expects the deal to close in three to six months.

A key question is the impact on the company's newspapers.

Apollo and Cerberus "have reputations as companies that come in and try to find efficiencies," Doctor said. "The problem is that there is not a lot of cutting you can do without further reducing the quality of the product."

He speculated that the new owner could cut days of publication, as another chain, Advance Newspapers, has done.

"They'll be looking at how they can hold onto advertisers and customers while reducing expenses as much as they can. The reason they have to cut is that print advertising continues to go down about 7 to 8 percent a year," he said.

A controlling interest in DFM is held by Alden Global Capital, a New York-based hedge fund that specializes in distressed debt. DFM was created in September 2011 to manage the newspapers of the Journal Register Co. and Denver-based MediaNews Group.

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