HONG KONG — The Australian mining billionaire Georgina Rinehart has threatened to sell her recently acquired 19 percent stake in Fairfax Media, sending shares in the Australian publisher tumbling on Tuesday.
The announcement is the latest volley in her battle to win seats on the board of the company, which publishes leading newspapers including The Sydney Morning Herald, The Australian Financial Review and The Age. Mrs. Rinehart, who is known as Gina, is the richest woman in Asia.
Fairfax proposed a dramatic restructuring on June 18 to address several years of declining circulation, including plans to cut 1,900 jobs, or about 20 percent of its work force, over the next three years. On the same day, Mrs. Rinehart’s privately held Hancock Prospecting said it had increased its stake in Fairfax to 18.7 percent from 12.6 percent.
Despite several months of campaigning for board representation at Fairfax, however, Hancock has been denied a seat and has so far resisted calls to sign a pledge to maintain editorial independence at the publisher.
Hancock “had hoped that Mrs. Rinehart may be viewed by the board as a successful business person and a necessary ‘white knight,’ ” the mining company said on Tuesday in a letter posted on the Web site of the government-owned Australian Broadcasting Corporation.
“However unless director positions are offered without unsuitable conditions, Mrs. Rinehart is unable to assist Fairfax at this time,” Hancock said in the 11-page letter. In response to the denial of board representation, Mrs. Rinehart’s firm said it “may hence sell its interest, and may consider repurchasing at some other time.”
Shares in Fairfax closed down 3.5 percent on Tuesday after the statement from Hancock, closing at 55 Australian cents apiece, their lowest close since listing in 1992. The stock is down 23.6 percent this year.
The moves at Fairfax by Mrs. Rinehart — who in March was ranked No. 29 on the Forbes list of the world’s richest people, with a fortune of $18 billion — come amid one of the biggest shake-ups in Australian media in recent history.
Last week, the Australian arm of Rupert Murdoch’s News Corporation offered 1.97 billion Australian dollars ($1.98 billion) in cash in a takeover bid for the Sydney-listed Consolidated Media Holdings, controlled by the Australian casino and media magnate James Packer.
Mr. Murdoch’s News Limited, publisher of leading newspapers including The Australian, The Daily Telegraph and The Herald-Sun, said the deal would give it control over two of the country’s leading pay television businesses, Fox Sports Australia and the subscription cable television business Foxtel.
Mr. Packer, a billionaire who also invests in casinos in Australia, Macau and London, said the offer was “fair” and that he would support it, absent a higher cash offer.
Article source: http://dealbook.nytimes.com/2012/06/26/australian-billionaire-rinehart-threatens-to-dump-fairfax-media-stake/?partner=rss&emc=rss