Southern Cross Media Group (ASX:SXL) has walked away from the attempt by the unlisted Australian Community Media to rid itself of some of the biggest regional newspapers in Australia.

The titles include The Newcastle Herald, Canberra Times, Illawarra Mercury, and two major papers in Tasmania, as well as smaller titles in NSW and Victoria, plus a number of regional rural skewing papers and websites.

ACM bought the regional papers from Fairfax Media just before the pandemic and has made a concerted attempt in the past two years to find a deal to take them off its balance sheet.

The papers have been offered back to Fairfax (Nine Entertainment) and several other suggested buyers with no success.

Southern Cross said in a statement on May 28 that ACM had approached it with a proposal to acquire the papers. It was the second approach from ACM concerning the papers and Southern Cross's regional TV business.

Southern Cross said it would investigate the proposal and on Thursday (June 27) issued a "no deal" statement to the ASX.

"Following a review with ACM and consultation with major shareholders, SCA has decided not to pursue ACM's proposal," Southern Cross said.

"ACM's proposal would have involved SCA acquiring a portfolio of ACM's key print and digital news publications and its agriculture division. ACM's digital and regional capabilities and content hold some attraction for SCA.

"However, SCA has concluded that the relevant assets do not align with SCA's audio-focused strategy and would not create value for SCA shareholders.

"The SCA Board therefore considers it would not be in the best interests of SCA shareholders to pursue ACM's proposal," Southern Cross said.

There has been no mention of prices and values in the statements from Southern Cross.