The mining billionaire Gina Rinehart is selling her A$306m (£156m) stake in Fairfax Media after more than four years of fraught relations with the owner of the Sydney Morning Herald, according to reports.
Rinehart, Australia’s richest person, sold her 14.99% stake at 86.75 Australian cents a share, below the 96 cents closing price. Her company blamed falling revenues and bad business decisions at Fairfax for her decision to sell.
John Klepec, chief development officer at Rinehart’s Hancock Prospecting, said Fairfax management had no workable plan to revive the company and deal with declining business and circulation.
“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,” he said, according to The Australian.
Rinehart, whose fortune is estimated at A$11.7bn (£7.6bn) by Forbes, clashed frequently with Fairfax’s chairman, Roger Corbett. He denied Rinehart a seat on the board after she refused to sign Fairfax’s editorial independence charter.
Rinehart began buying shares in Fairfax in late 2010, acquiring a 1.5% stake a day after the sudden departure of its chief executive, Brian McCarthy. Rinehart became the company’s biggest shareholder in February 2012 when she bought a 14% stake and went on to build her holding to 18.7% in June 2012.
She was believed to be planning a takeover of Fairfax before she reduced her stake below 15%. Fairfax’s insurance policy did not protect directors holding more than 15% of a company from potential lawsuits.
Fairfax’s newspapers also include Melbourne’s The Age and it also owns business magazines, radio stations and a digital operation.
Rinehart has retained her position at the top of Australia’s rich list despite a A$6bn fall in her fortune caused by the plunging price of iron ore.
Hard history
December 2010 Rinehart revealed as buyer of an A$50m, or 1.5%, stake in the company a day after the abrupt departure of its chief executive.
January 2011 Rinehart continues building her stake and owns 4% by the end of the month.
February 2012 Increases her stake to 14%, with Fairfax shares climbing back above 81 cents.
March 2012 Rinehart requests seats on the company’s board.
June 2012 Reports emerge that Corbett is blocking Rinehart’s request for board representation, and that she has refused to sign the Fairfax board’s editorial independence charter. Rinehart says there are “questions to be raised concerning the current chairmanship” of Fairfax and later calls for Corbett to be subject to “performance milestones”.
During the month Rinehart’s holding in Fairfax builds to 18.7% as the company’s shares plunge below 60 cents.
July 2012 Rinehart dumps part of her stake in Fairfax, reducing her holding back below 15%, with its shares at 58.5 cents. Later in the month, Rinehart ally Jack Cowin joins the Fairfax board.
August 2012 Rinehart sends letters to small Fairfax shareholders urging them to support her bid for board seats and that the charter of independence should be optional for directors to sign.
December 2012 Rinehart’s friend John Singleton buys a toe-hold stake in Fairfax. Its shares are trading at 47.5 cents.
September 2013 News Ltd reports that Rinehart has considered a full takeover of Fairfax. Its shares recover to more than 80 cents.
Timeline courtesy of the Australian Financial Review