Fairfax Slumps After Rinehart Says May Quit Stake: Sydney
Fairfax Media Ltd. (FXJ), Australia’s second-largest newspaper publisher, fell to a record low in Sydney trading after its biggest shareholder Gina Rinehart said she may sell her stake if she isn’t offered seats on the board.
The stock slumped 3.5 percent to 55 Australian cents at the close of trading, its lowest close since the company was listed in 1992, according to data compiled by Bloomberg. The benchmark S&P/ASX 200 Index declined 0.4 percent.
Rinehart, who owns 19 percent of Fairfax through her closely held Hancock Prospecting Pty. Ltd., is seeking directorships without any conditions, such as agreeing to sign the company’s so called Charter of Editorial Independence. The mining magnate, Asia’s richest woman with an $18.5 billion fortune according to the Bloomberg Billionaires Index, is pushing the company to address a slumping share price, declining newspaper circulation and record losses.
“HPPL had hoped that Mrs Rinehart may be viewed by the board as a successful business person and a necessary ‘white knight,’” Hancock Prospecting said in a letter posted on the website of the Australian Broadcasting Corp. “Unless director positions are offered without unsuitable conditions, Mrs Rinehart is unable to assist Fairfax at this time. HPPL may hence sell its interest, and may consider repurchasing at some other time.”
Fairfax announced last week it’s cutting 22 percent of its workforce in a bid to halt sliding revenue and earnings.
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