SCA defend market disclosure

On Friday, after Kyle & Jackie O announced their departure from 2Day FM, shares in Southern Cross Austereo (SXL) fell from a high of $1.90 to a low of $1.74.

The decline was queried by the Australian Stock Exchange, asking SCA, "Is the Company aware of any information concerning it that has not been announced to the market which, if known by some in the market, could explain the recent trading in its securities ?"

In its response, SCA said it wasn't aware of any information that had not been announced and went on to say :-

"On 1 November 2013 the Company issued a media release advising that the Kyle and Jackie O Show, its breakfast show on Sydney station 2Day FM, would not be returning in 2014.

Soon after the release and given the high media profile of the show, there were a number of media articles published, which may have led to speculation regarding the impact of the show’s loss on the Company. This may in turn have led to a change in price of the Company’s securities.

However, media commentary on the matter did not take into account that the Company is a diversified media business with 78 regional and metropolitan radio stations, a suite of digital stations, 21 commercial television licences, 105 leading websites, mobile sites and mobile applications. Also, in relation to its radio stations, changes to its radio shows occur regularly.

Further, the total revenue generated by the station 2Day FM constitutes approximately 6.5% of the Group’s total revenue. Other than this, the Company is not aware of any explanation for the change in price in the securities of the Company."

The share price was clearly reacting to the projected loss of revenue, as the duo are estimated to contribute 3% of SCA's revenues or 35% of 2Day FM's revenue.

The Australian Securities & Investments Commission may now investigate the share price movement.

The query from ASX and the response from SCA are in full below :-