Independent Newspapers has increased its shareholding in Australian Provincial Newspapers from 23 per cent to 34 per cent, after buying shares from Kelsal, the O'Reilly family trust.

The price paid to the O'Reilly trust has not been disclosed, but it is understood that Independent, exercising an option to buy, paid around £30 million for the shares.

APN is currently trading at $2.40, and the price paid is understood to be close to the market price. The provincial newspaper group has a market capitalisation of Aus$561 million (£280 million).

Following the sale, the O'Reilly trust owns 9 per cent of APN, Independent 34 per cent with the balance held by institutional and private Australian investors.