Rinehart and Singleton announce alliance to target Fairfax Media
Fairfax Media looks set to face another year of ownership turmoil with Gina Rinehart and John Singleton announcing that they plan to work together.
Rinehart – whose fortune comes from the mining industry – has so far been rebuffed from a place on the board of the media company despite building a holding which reached around 15% of the company before she reduced it.
Meanwhile, Singleton’s attempt to buy Fairfax’s radio assets last year, eventually failed. Singleton is one of the owners of Macquarie Radio Network which owns Sydney’s number one talk station 2GB.
Now Rinehart’s company Hancock Investing and the Singleton-led Gutenberg Investments will work together. A formal announcement will be made to the ASX on Monday. Singleton has accused the board of having a “lack of direction”
According to the announcement: “Mr Singleton said today that Gutenberg Investments purchased shares in Fairfax Media as a result of the Fairfax board definitively closing the door on a sale or joint venture of their radio assets to Macquarie Radio Network. ‘For the amount of money I was prepared to pay for the radio assets of Fairfax I could buy a significant amount of all the assets of Fairfax at a far lower price to earnings multiple. Hence, with my preferred direct route closed, I have decided to pursue another path.'”
Singleton added: “Whilst discussions are at a very early stage, in accordance with legal advice, we will file a substantial shareholder notice on Monday to inform the market of our association before developing any plans.
“However it is important to state that both Gina and I believe that the lifeblood of Fairfax is the integrity and accuracy of its journalism.This in no way would be compromised if Hancock Prospecting and Gutenberg Investments had a significant say in the future of Fairfax.”
Fairfax owns newspaper mastheads including The Age and the Sydney Morning Herald and radio assets including Melbourne talk market leader 3AW and Sydney’s 2UE.
The statement from Singleton added: “I think the current board has struggled to come to terms with the new environment, which is there for all to see in the share price and the lack of direction at the company.”
Fairfax has lost almost 90% if its market capitalisation over the last five years.
On Friday, Fairfax’s share price closed at 47.5c, giving the company a market capitalisation of $1.1bn. A year ago, the company’s share price was 72c whiletwo years ago it was $1.38. Three years ago it was $1.78 and five years ago it was $4.63.
Singleton’s statement concluded: “I was on the board of Fairfax when Sir Zelman Cowen was Chairman of the board some 20 years ago, when the existing Fairfax Charter of Independence was drawn. There is no reason why a group of eminent and experienced Australians should not review the charter to ensure and enable its relevance for today, and the current very challenging times for the media.”
Two boys meet in a pub. Possibly one they own. They get p#ssed and start talking about things they’d like to do. Why not buy some Fairfax shares and call Gina? Then we can get legal advice to say we are associates. Then we can put out a press release in the most boring news days of the year. Then people will put stories on page one (The Oz, MumBrella, etc).
All this says is that no one thinks Fairfax is managed by credible people and certainly not people with any clout. (And by the way, did anyone notice Corbett’s Xmas gift? His board seat at WalMart ranks with one of the world’s most embarrassed after they had to admit to extensive bribes in growing their store numbers in Mexico etc).
Ship of fools raided by drunks and grumpy people. How sad.
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