TORONTO - Canwest Global Communications could fetch more than $1 billion for its newspaper assets - including the National Post - as signs of life in the finances of the newspaper industry drive up interest in acquisitions, industry observers suggest.

Chris Diceman, an analyst at Dominion Bond Ratings Service, believes if Canwest moves ahead with rumoured plans to sell its newspapers, it could pull in between $600 million and $900 million for the lumped together assets in a first round of bids.

"If there was a bidding war for these assets either in, or part of, creditor protection, that multiple may go up even higher than that," he said Thursday.

It's an optimistic tone for an industry that just a year ago seemed like it was near death as North American media corporations grappled with lower advertising revenues and declining readership in a deepening recession.

Since then, major papers have slashed costs, laid off workers and, in some instances, shuttered local dailies.

On Wednesday, a ray of hope emerged when the New York Times Co. yanked the Boston Globe newspaper off the market, saying the Globe has "significantly improved its financial footing by following the strategic plan it set our at the beginning of this year."

Canwest is in an entirely different situation after some of its divisions, including the one that houses the National Post, filed for creditor protection last week.

The Winnipeg media company has amassed nearly $4 billion in debt, with most of it coming from the purchase of Conrad Black's newspaper assets in 2000 and the group of specialty channels from Alliance Atlantis in 2007.

Canwest tried to avoid creditor protection by selling off its lesser assets earlier this year, while keeping its most prized divisions. Gone are U.S. political magazine the New Republic and its E!-branded TV stations, as well as European radio stations.

But expectations are that Canwest will have to sell of more of its remaining assets in the restructuring process, and the newspapers are expected to be the next to go.

One analyst, who asked to remain anonymous, said that the National Post is considered a money-loser and that Canwest would want to lump it in with other more profitable papers in order to get it sold.

"The Post itself has been carried in all analysts valuations at either $0 or some nominal value of between $10 and $20 million bucks," he said.

"Canwest hasn't really made a go at making that thing sustainably profitable."

He estimated the company could receive $1 billion to $1.4 billion for the newspapers.

It's difficult to determine a value for the National Post by itself because Canwest traditionally hasn't broken out the results of the paper from the rest of its publishing assets. However, the company told analysts in a conference call earlier this year that the Post has pulled off a break even quarter, and was moving towards profitability.

Diceman said as optimism develops in the media industry there could be more interest for the newspaper division.

"All newspaper companies have to really take a close look at where these businesses will be after the economy improves," he said.

"A lot of the companies have taken this opportunity to adjust their cost base which should put them on better footing for those incremental structural changes that should happen over the next couple of years.

Included on that list are names like Torstar Corp. (TSX:TS.B) and Black Press.