Mining magnate Gina Rinehart has sold her 15 per cent stake in Fairfax Media, ending her association with the publisher of the Sydney Morning Herald and The Age and accusing them of having ‘no plan’ to revitalise the publisher.
Market sources have told Mumbrella of a large share movement this afternoon which is understood to be Rinehart selling her 14.99 per cent holding. Since buying the shares two-and-a-half years ago, she had been the company’s biggest shareholder.
This afternoon the Fairfax share price closed at 96 cents. However, Mumbrella understands that Rinehart sold the shares for 86.75c. It was her third attempt in recent weeks to sell, and the 353.4m shares did not go to a single buyer but rather to a wider group of investors.
John Klepec, chief development officer of Rinehart’s Hancock Prospecting, said in a statement: “We have come to the conclusion that the senior leadership of Fairfax Media has no workable plan to revitalise the company and address the declining business and circulation numbers.”
“A series of bad decisions made by the leadership team has instead increased the number of publication errors and reduced the company’s performance to cover news to standards expected to maintain the credibility of some of the oldest and finest newspaper mastheads in the country.
“The Fairfax radio stations will be in more successful hands when moved into the joint venture and management oversight of John Singleton’s Macquarie Radio Network.
“Should the Fairfax Media leadership change, we may consider a future role in the company.”
A source close to Fairfax told Mumbrella in response to Rinehart’s statement said: “We expect Mrs Rinehart’s investment in Fairfax has been one of her better media investments.”
Hancock Prospecting bought into Fairfax Media at a range of prices ranging from 60 cents to 88.17 cents and it is thought that her profit, including dividends, could be as much as $5m.
Sources have also confirmed that Morgan Stanley and Hancock Prospecting entered into an underwritten placement agreement, which sees the brokering house takeover the Fairfax shares and sell them off to market.
Rinehart originally bought into Fairfax in mid 2012 with a 19 per cent stake in the company, before selling down that stake to the 14.9 per cent share, but had been repeatedly thwarted in her attempts to secure a seat on the board because of a refusal to agree to its charter of editorial independence.
She has enjoyed a hostile relationship with the Fairfax board delivering a first strike against its remuneration report in 2012 and voting against the reelection of director Todd Sampson and the remuneration bonuses for CEO Greg Hywood at last year’s AGM.
All substantial shareholders are required to advise the stock exchange if they buy or sell more than one per cent of the company. The trade is thought to have taken place after hours.