Nine acquired the stake in March,,following a sell-down from Macquarie Group. It bought 9.99 per cent of stock for $1.15 per share,which it now sold at $1.54 a share.
![Nine Entertainment chief executive Hugh Marks.](https://static.ffx.io/images/$width_300%2C$height_150/t_crop_auto/t_sharpen%2Cq_auto%2Cf_auto/d21508583b48cfda2d5a2723c6e4a2dbf609c752)
Nine Entertainment chief executive Hugh Marks.Louie Douvis
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"Our relationship with Southern Cross has never been better,"Nine chief executive Hugh Marks said.
"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."
Southern Cross shares slumped as much 16 per cent on the move,and were trading down 13 per cent at $1.45 in the mid-afternoon. Nine,meanwhile,enjoyed a 6 per cent surge to $1.03 rising above $1 for the first time in a month.
In April,Nine and Southern Cross signed a five-year affiliate agreement,,WIN Corporation and Network Ten.
,but talks cooled after the former's share price continued to rise.
Any takeover or merger would have required the government's proposed media ownership regulation changes to be successful.
The Turnbull government reintroduced its proposed changes to media ownership regulation in the first sitting week of the spring session of Parliament.
The Coalition is seeking to remove the"reach rule",preventing networks from broadcasting to more than 75 per cent of the population,and the"two out of three rule",preventing media companies from owning a TV network,radio station and a newspaper in the same market.
Should the law changes get passed,they could make way for a wave on consolidation within the traditional media sector. However,it is argued that the removal of the two pieces of legislation proposed by the government would only allow for a limited number of transactions before other regulation prevents further activity.
before looking at other regulation.
"Nine seeks that all media reform be deferred until the issue of licence fees is addressed,"Mr Marks said in the company's submission to a Senate inquiry.
"Changing any ownership rules before addressing onerous and unfair licence fees has the potential to distort the market and have unintended consequences."
The government is considering more changes to media regulation,including a further reduction in licence fees. Sources said the decision on licence fees was likely to come in the mid-year economic fiscal outlook.