The Financial Times Deutschland reports that Hans Barlach, the owner of the Hamburger Morgenpost, is negotiating with Montgomery and US private equity specialist Veronis Suhler Stevenson.
In November, Montgomery's investment vehicle Mecom and partner VSS took over German newspaper group Berliner Verlag for an estimated £100m.
It became the first foreign company to own a German newspaper, despite a campaign against the sale by staff fearful of Montgomery's reputation for cutting costs and jobs.
Berliner Verlag publishes the quality broadsheet Berliner Zeitung, the tabloid Berliner Kurier, and the advertising freesheet Abendblatt. It also owns a modern printing plant that prints its own and other newspapers, including the FT Deutschland.
Montgomery said at the time of the Berliner Verlag acquisition that he was looking to merge many newspapers in Germany.
In the UK in recent weeks, Montgomery has been linked to a possible bid for the Daily Mail & General Trust's regional newspaper division Northcliffe, which is expected to be sold for as much as £1.5bn.
If the Daily Mirror is put up for sale by Trinity Mirror following the departure of chairman Sir Victor Blank, it is also highly likely that Montgomery will bid for the Mirror and its sister national newspaper titles the Sunday Mirror and The People.
If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the .