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The boss of Australian publisher Fairfax Media quit on Friday without explanation, feeding speculation the board may prefer his deputy and rival, Brian McCarthy, to steer the firm through tough times.
Fairfax, which publishes The Sydney Morning Herald, The Age and leading business daily the Australian Financial Review, faces an advertising downturn, recently axed 5 percent of its staff and is rumored by local media to be considering a dividend cut.
Fairfax shares initially jumped on the news that Chief Executive David Kirk was resigning and would be replaced on an interim basis by deputy CEO Brian McCarthy, ex-boss of regional publisher Rural Press which was taken over by Fairfax last year.
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The shares surged as much as 8.7 percent after the announcement, before easing back to remain virtually unchanged at A$1.50 in the morning session in a slightly weaker overall market.
"He (McCarthy) has a lot of respect in the industry for his ability to run businesses," said Scott Maddock, a fund manager with 2MG Asset Management, noting that McCarthy had a track record of maintaining strong cost controls at Rural Press.
Fairfax did not give a reason for Kirk's departure, nor did it indicate whether McCarthy was likely to take over on a permanent basis, saying only that the board would meet on Wednesday.
"During his more than three years in the role, David has been an outstanding CEO of Fairfax Media," Fairfax said in a statement.
"He and his team have led the complete re-positioning of the company, from a metropolitan newspaper publishing business to a position in which the company is now clearly the leading media company in Australasia.
In August, Fairfax reported a 46.8 percent jump in annual profit, helped by strong performance of its digital businesses.
Fairfax did not immediately return calls on the matter.
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