MINING GIANT ENTERS MEDIA EMPIRE STAKE

Australian miner in $50m Fairfax buy

Julian Lee and Colin Kruger
December 8, 2010

THE drama continued at Fairfax Media yesterday with mining billionaire Gina Rinehart revealed as the buyer of a $50 million stake in the company, one day after the abrupt departure of its chief executive, Brian McCarthy.

Market sources confirmed Ms Rinehart was behind the acquisition, which follows her raid on the Ten Network last month that netted her 10 per cent of the broadcaster. Morgan Stanley, which conducted Ms Rinehart’s raid on Ten, would not comment yesterday, nor did Ms Rinehart’s Hancock Prospecting.

Fairfax chairman Roger Corbett said: ”The company welcomes the investment interest and show of confidence from all our shareholders.”

Advertisement: Story continues below

It is not known if Ms Rinehart plans to increase her stake in Fairfax, owner of The Age. Her current stake represents 1.5 per cent of the company’s stock.

More than 60 million Fairfax shares were traded on Monday following the departure of Mr McCarthy, who has been replaced on an interim basis by Greg Hywood. Because broking codes have been removed from trading systems, there is no confirmation of how many of those shares were traded by Morgan Stanley.

Under sharemarket rules, once Ms Rinehart’s holdings reach 5 per cent, she must declare ownership. It is then that questions will be asked in earnest as to what her intentions are towards the company, which has an open and fluid register.

Former director John B. Fairfax’s Marinya Media is the largest individual shareholder with 9.7 per cent. The largest institutional investor is Colonial First State with 11 per cent.

In May this year, Fairfax signed a deal with Ten to serve short clips of news footage to complement news reports by Fairfax journalists. But Ms Rinehart’s second media acquisition in as many months may have more to do with gaining influence as she protects a mining empire worth around $5 billion.

Ms Rinehart has continued to be a vocal critic of the mining tax, including its latest iteration, the mineral resource rent tax.

In a recent article she wrote for a mining publication, Ms Rinehart said: ”Changes are needed, and not only to bury the MRRT immediately and permanently.”

Sourced & published by Henry Sapiecha

Tags: , , , ,

Leave a Reply

 

Categories
Search