Mining magnate Gina Rinehart.MINING magnate Gina Rinehart has increased her hold on Fairfax Media in a sharemarket raid that has taken her stake in the publishing house to more than 15 per cent.
After months of her ratcheting up pressure on the board to deliver her two board seats, market sources believe Mrs Rinehart, already the company’s largest shareholder, has lifted her stake by about 2 per cent to 15-16 per cent.
The world’s wealthiest woman is believed to have bought at least half of the 78.7 million shares traded yesterday – quadruple the normal trading volume – including a single line of 42 million shares sold at lunchtime for 60¢ a share.
A spokesperson for Mrs Rinehart declined to comment, but all major investors are required to advise the stock exchange if they buy or sell more than 1 per cent of the company within two days.
Mrs Rinehart is believed to have appointed brokers Bell Potter to buy more shares in Fairfax (owner of The Age and The Sydney Morning Herald) in her bid to lift her stake to 19.99 per cent – the maximum allowed before a shareholder needs to make a takeover offer.
The more shares Mrs Rinehart buys, the harder it becomes for the board to resist her push for seats, particularly if she wins approval from other institutional investors.
A fellow major shareholder, funds management group Allan Gray, which also recently lifted its shareholding to more than 9 per cent, has previously expressed qualified support for Mrs Rinehart. Managing director Simon Marais has called for an overhaul of the company, saying the board needed a tough outsider to shake things up and that Mrs Rinehart might be the right person.
Mrs Rinehart has been an outspoken critic of the board and management of the company, along with her close adviser Jack Cowin, who has been tipped as Mrs Rinehart’s choice for a second board position.
Sydney radio network owner John Singleton, a friend of Mrs Rinehart’s, told The Age yesterday the board’s refusal to give her a seat was ”the worst corporate insult I’ve ever seen”.
Late last month, Mrs Rinehart refused to speculate on whether she would lift her stake as the company’s share price slumped to record lows, saying: ”It is too early to say if Hancock Prospecting [the company through which Mrs Rinehart
owns her stake] will hold its more than 13 per cent shares in Fairfax or sell them or find some other satisfactory resolution.”
Hancock Prospecting chief development officer John Klepec said this week that the board should demonstrate its commitment by buying more shares.
”If the chairman and board are true believers in the strategy to assist the company, surely they would have a reasonable percentage of their net worth in Fairfax and be taking opportunities to add to this when the opportunity arises,” he said.
”We understand, for instance, that the chairman only has 99,206 shares and has not added to his shareholding.”
Michael McCarthy, chief market strategist at CMC Markets, said the share price, which has fallen nearly 85 per cent in the past five years, demonstrated that investors did not believe the company had sufficiently embraced the opportunities presented by online media.
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