Southern Cross Media shares have dropped 13 per cent after broadcaster Nine Entertainment sold its investment in the radio and regional television company for $30 million.
Nine sold its 9.99 per cent stake in Southern Cross - the owner of the Triple M and Hit Network radio businesses , at $1.54 per share, a 33.9 per cent premium on the $1.15 the group paid a share just six months ago.
Nine's head of investor relations Nola Hodgson said the stake was acquired to help shore up a regional television affiliate deal with Southern Cross Media.
"Part of the motivation was to ensure we could give ourselves every opportunity to get the best affiliate deal and that helped with that process," Ms Hodgson said.
Nine struck a new regional partnership with Southern Cross in April, ending its long association with billionaire Bruce Gordon's WIN, which subsequently struck a new deal with Network Ten.
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Nine's five year deal with Southern Cross began in July, meaning Nine's programs are now shown on Southern Cross channels in regional Queensland, Southern NSW and regional Victoria.
"Our relationship with Southern Cross has never been better," Nine chief executive Hugh Marks said in a statement on Friday.
"The early performance of our new affiliate agreement has surpassed our expectations, and we look forward to a long and prosperous relationship between our two companies."
Nine said the proceeds of its Southern Cross share sale will increase its flexibility in executing its strategy to develop its free-to-air, digital and video-on-demand services.
Southern Cross Media shares fell 22 cents, or 13 per cent, to $1.465, giving the group a market capitalisation of $1.1 billion, in a lower Australian share market.
Nine shares rose eight cents, or 8.2 per cent, to $1.055.
