Nine has grabbed a strategic stake in Southern Cross media

Photo: Michael Regan/Getty Images

Nine Entertainment has taken a strategic foothold in regional television and national radio, positioning itself for the Turnbull government’s proposed changes to media ownership laws.

Nine paid about $88.3 million for a 9.99% stake in Southern Cross Media, a national radio broadcaster and regional television player.

The free-to air-television network, suffering from a weak advertising market, bought the holding overnight from Macquarie Group at $1.15 a share.

A short time ago, Southern Cross shares were down 4% to $1.13. Nine was up 0.45% to $1.57.

Nine made no other comment other to confirm the purchase.

However, the move is part of positioning by media companies in anticipation of changes in cross media rules which would allow them to own television, radio and newspaper assets in the same market.

Nine is cutting costs as advertising revenue shrinks. Its profits fell 6.1% in the first half to $78.4 million on a 5% fall in revenue to $690.3 million.

TV pioneer Bruce Gordon, the owner of the regional TV network WIN Corp, is the largest shareholder in Nine with 14.99%.

Earlier this month he was behind a raid on Nine which grabbed 3.4% for about $50 million. At the moment, Deutsche Bank has the shares after Gordon lent the investment bank the cash to buy them.

The move puts Gordon in a position to make a full takeover if the government is successful in changing laws to get rid of the current cross media ownership rules.

This would allow Gordon to increase his holding above the current 15% limit and move to take control.

Gordon, who in 1979 gained control of Television Wollongong Transmission, which later became WIN, also has a 14.95% stake in Network Ten.

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