Apollo Global Management equity firm is preparing a $400M bid for Digital First Media, owner of the Denver Post, San Jose Mercury News, St. Paul Pioneer Press, Los Angeles Daily News and New Haven Register, according to a Reuters report.

DFM CEO John Paton has been studying strategic alternatives for the company due to the "seismic change" shaping the media environment driving the need to "rapidly compete in the digital world.

UBS Securities is advising the New York-based DFM.

Apollo edged out Cerberus Capital in deal.

Reuters reported that despite shrinking newspaper readership, buyout firms see ways to squeeze out profits via cost cuts and new digital products.

DFM is the nation's No. 2 newspaper chain in circulation with 76 daily papers in 15 states and 800 multi-platform information products. It has a monthly reach of more than 75M customers.