Australia’s richest person, mining magnate Gina Rinehart, is considering taking over respected Fairfax Media Ltd out of frustration at its direction, a report said yesterday.
Rinehart is already a major shareholder in the newspaper, radio and digital firm that publishes the Sydney Morning Herald, the Australian Financial Review and the Age in Melbourne.
However, rival the Australian newspaper, which is owned by Rupert Murdoch’s News Corp, yesterday reported that Rinehart had approached business associates for suggestions on who could better manage Fairfax if she decided to take it over.
“It is frustrating for Gina, who has had enormous success in business, to be watching one of her more public investments going so badly,” an unnamed source told the paper.
The Australian said that Rinehart, who has a 14.99 percent stake in Fairfax, would be more likely to take over the company if she could find an executive who could improve its earnings.
“She genuinely wants the company to do well and needs people who can go in and fix it,” the source said.
“There’s a question over how long she can tolerate seeing Fairfax heading the way it’s going without taking action or getting out,” the source said.
Although a major shareholder, Rinehart has been unable to secure a seat on the Fairfax board for herself. However, Fairfax chairman Roger Corbett has allowed Jack Cowin, founder and chairman of Competitive Foods Australia and a friend of Rinehart’s, a place on the board.
Rinehart’s A$20.01 billion (US$18.8 billion) fortune stems from her late father’s iron ore firm, which she took over in 1992 and which she is credited with expanding in Western Australia and Queensland.
She surprised when she entered the media sector in late 2010, taking stakes in commercial television station Ten Network and Fairfax.
However, these have been lean years for the media sector, with Fairfax in 2012 announcing it was sacking hundreds of staff and putting its newspapers behind a paywall as it struggled with the transition to digital given sliding print advertising and circulation revenues.
In August last year, Fairfax posted an annual loss of A$16.4 million, a big improvement over losses of A$2.7 billion the previous fiscal year, but not enough to stop the company proposing axing 70 more jobs in May, prompting journalists go on a 24-hour strike.
Fairfax had no comment on the article in the Australian.
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