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Southern Cross shares fall 5.8%


Southern Cross Media Group shares have tumbled to a near five-week low amid a backlash over 2DayFM's Duchess of Cambridge prank hospital call.

The owner of the Sydney radio station suspended advertising on 2DayFM until Wednesday as it faced public anger over the apparent suicide of the London nurse who took the call from DJs Mel Greig and Michael Christian.

Southern Cross shares sank as much as eight per cent in early trade before closing 6.5 cents, or 5.88 per cent, lower at $1.04.

It was the stock's lowest close since November 6 when it finished at $1.03.

The advertising suspension came after major retailer Coles and telco giant Telstra pulled their ads from 2DayFM at the weekend after news of the death of nurse Jacintha Saldanha.

While some market watchers estimated the decision to suspend advertising could cost Southern Cross at least $500,000, CMC Markets chief market analyst Michael McCarthy said the company's bottom line would be largely unaffected by the backlash over the incident.

"The overall impact on revenue for Southern Cross Austereo has been grossly exaggerated by today's selloff in the shares," Mr McCarthy said on Monday.

"As we saw earlier in the year with other notable radio stuff-ups, there was a short period of sponsors walking away before new sponsors and old sponsors came running back because they will still maintain audience."

The two 2DayFM DJs last week called the King Edward VII Hospital posing as the Queen and Prince Charles and obtained private information about Prince William's wife, Catherine.

Ms Saldanha, who apparently took her own life on Friday, took the initial call from the DJs and transferred them to another nurse.

Her colleague then unwittingly passed on details of Catherine's condition to the DJs.

Southern Cross held an emergency board meeting on Sunday and said it would cooperate with any investigations.

Southern Cross chief executive Rhys Holleran said the station tried at least five times to contact the hospital to discuss the pre-recorded prank before it went to air.

He said the company was deeply saddened by what had happened and was committed to helping any authorities wanting to investigate the matter.

Communications Minister Stephen Conroy said the media regulator ACMA was considering whether to initiate its own inquiry, beyond the usual process of giving broadcasters the opportunity to respond to complainants.

But Mr Holleran said he did not believe any ACMA codes governing radio broadcasts had been breached or that the station's licence was in jeopardy.

RBS Morgans Ipswich Tony Russell said he expected the impact of Ms Saldanha's death on 2DayFM would be short-lived.

"It won't be a long-term problem at all," Mr Russell said.

"After a bit of time things will resume back to where they were."

Southern Cross' metropolitan radio stations had revenue of $273.6 million in 2011/12.