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Australia’s Rinehart scales back Fairfax stake

July 5, 2012

SYDNEY: Mining mogul Gina Rinehart today sold down her stake in ailing Australian media firm Fairfax, offloading A$50.1 million in shares following a row over board and editorial influence.

Rinehart, the world’s richest woman with assets worth A$29.17 billion, scaled back her holding in Fairfax from just under 19% to 15%, a week after giving an ultimatum to the chairman about reversing the firm’s fortunes.

Her iron ore company, Hancock Prospecting, said the share sale, worth US$51.4 million, was to a “major Australian fund manager”.

It followed concerns from chairman Roger Corbett over a director of the firm holding more than 15% of shares.

Corbett’s concerns were linked to the insurance policy protecting directors from being sued. Shareholders with a stake greater than 15% have the power to sue directors.

“This was one of the key issues recently raised by the chairman of Fairfax and needed to be resolved by either the chairman authorising endeavours to raise the 15% limitor… or by sale of shares so that the largest shareholder had less than 15%,” Hancock said.

“Given the chairman did not undertake the former we have taken the latter and sold in a single tranche to minimise any market impact.”

Rinehart’s Hancock also denied “unsubstantiated rumours spread by others that we are about to make an offer for the company”.

“We have previously stated we are not seeking control of Fairfax, just the appointment of two directors plus an independent out of up to 12 directors on the board,” it said in a statement to the Australian Stock Exchange.

Rinehart, who has been locked in a bitter tussle with Corbett and Fairfax over board influence and signing the media company’s charter of editorial independence, is still the group’s largest shareholder.

The company recently announced 1,900 job cut as part of a radical digital-focused restructure as it grapples with the challenges of audiences and advertisers migrating online.

- AFP


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