Guardian Media Group (GMG), which is owned by the not-for-profit Scott Trust, is to appoint advisers in the next few weeks to oversee the review, senior sources confirmed this weekend.
Insiders predicted that the most likely outcome would be the disposal of Trader Media, the unit that houses Auto Trader and more than 60 other magazine titles.
A sale could net more than £1 billion, and would attract the attention of cash-rich private- equity groups already drawn to assets such as Northcliffe Newspapers, the £1.5 billion regional newspaper division of Daily Mail & General Trust.
Those close to the company said GMG was reluctant to commit itself to the investment needed to improve Trader Media’s profitability at a time when classified advertising revenues are increasingly being swallowed by new-media operators. However, they cautioned that a sale was not inevitable.
The latest financial results show operating profits in Trader Media rose from £74m to £117m last year on sales of £305m.
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It is thought that GMG’s radio division could also be sold, with Chrysalis, the owner of LBC, among those to have shown predatory interest in the past.
A number of investment banks and consultancy firms are in the frame to handle the strategic review. Three years ago NM Rothschild and Spectrum oversaw a similar process.
Under the terms of its establishment, the trustees of the Scott Trust, founded in 1936, have an obligation to preserve the financial and editorial independence of The Guardian. The left-leaning newspaper was relaunched in September in the Berliner format, a revamp that cost £80m. It was followed this month by a similarly far- reaching redesign for its sister Sunday paper, The Observer.
Early results have been mixed, with circulation figures for last month showing The Guardian up almost 6% year-on-year, but 5% down on the previous month.
The review comes as the company chooses a new chief executive. Carolyn McCall, chief executive of Guardian Newspapers, is among the favourites to succeed Sir Bob Phillis, who is stepping down to concentrate on a fight against cancer.
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Phillis has run GMG since 1997 and was responsible for the diversification of the group’s portfolio. He plans to retain his non-executive roles on the boards of ITV and All3Media, the television production group that is eyeing a flotation or sale later this year.