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Donerail Group, an investment firm led by former activist hedge fund Starboard Value LP executive Will Wyatt, is in talks to acquire Tronc Inc, the publisher of Chicago Tribune, people familiar with the matter said on Thursday.

If the talks lead to a deal, Tronc would become the latest U.S. newspaper publisher to fall in the hands of a private equity firm or a hedge fund, as regional papers struggle with declining circulation amid the proliferation of online media.

Donerail Group has secured financing for the deal and is in advanced negotiations with Tronc, the sources said, cautioning that a deal is not imminent and there is no certainty an agreement will be reached. If a deal is reached, an announcement could come later this month, one of the sources added.

One of the challenges facing Donerail, as a newly established firm, is convincing Tronc’s board of directors that it can go ahead with the deal, one of the sources said. The terms of Donerail’s offer could not be learned.

The sources asked not to be identified because the negotiations are confidential. Donerail declined to comment, while Tronc did not immediately respond to a request for comment.

Tronc shares rose 7 percent on the news to $17.75 on Thursday, giving the company a market capitalization of close to $650 million.

The Chicago Tribune reported on Wednesday that Tronc was weighing an offer from a private equity firm, without identifying it.

Wyatt is a veteran investor in the media and the consumer sector, having led some of Starboard’s biggest bets in the space, including in Tribune Media Co, one of the largest U.S. television station operators.

Tronc agreed to sell the Los Angeles Times, the San Diego Union-Tribune and some other newspapers to billionaire investor Patrick Soon-Shiong for $500 million cash in February, a move aimed at lowering its debt, slashing its pension liabilities and helping it expand its digital operations.

Former Tronc chairman Michael Ferro Jr’s fund Merrick Venture Management, which owns 25.6 percent of Tronc, agreed in April to sell its stake to McCormick Media for $208.7 million but subsequently terminated the sale of the stake, arguing that the investor group breached its obligations.

Tribune Co spun off its newspaper assets in 2014 as Tribune Publishing, which in 2016 renamed itself Tronc, short for “Tribune Online Content.”

Tribune Publishing had once been part of media conglomerate Tribune Co, that emerged from bankruptcy in late 2012 and was owned by Capital LLC and Angelo, Gordon & Co. In 2013, Tribune decided to separate its publishing business from its more-profitable broadcast division through a tax free spinoff.

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