Singleton buys into Fairfax
Illustration: Matt Golding
MEDIA and advertising entrepreneur John Singleton has established a toehold on the share register of Fairfax Media and opened up discussions with Fairfax's largest shareholder, Gina Rinehart.
The pair said little about their plans in a statement issued late on Friday, but Mr Singleton criticised Fairfax for a ''lack of direction'' and called for a review of the group's charter of editorial independence.
Fairfax chairman Roger Corbett has consistently maintained that while Fairfax, owner of The Age, welcomes Mrs Rinehart's investment interest, she cannot be invited to join the board until she accepts the board's governance principles, including the charter of editorial independence.
Discussions about ''key matters affecting Fairfax'' were at ''a very early stage'', Mr Singleton said on Friday, but the pair have legal advice that the discussions have created a legal association, and they will file a substantial shareholder notice with the Australian Securities Exchange on Monday.
Mr Singleton did not disclose the size of his stake, but is believed to have acquired close to 1 per cent of the media group's shares through Gutenberg Investments Unit Trust. He set the trust up in conjunction with his colleague and Macquarie Radio Network co-owner Mark Carnegie after his negotiations for the purchase of Fairfax's radio assets broke down. Mrs Rinehart owns just under 15 per cent of Fairfax.
Mrs Rinehart and Mr Singleton are friends, and their decision to explore an alliance edges up the pressure on the media group as it looks to execute a transition from print to digital media in 2013.
Mr Singleton's purchase of a stake in conjunction with Mr Carnegie also introduces Mr Carnegie to the media group's register as he is launching himself as a shareholder activist, notably on the register of Qantas.
In the statement released late on Friday, Mr Singleton said he bought shares in Fairfax ''as a result of the Fairfax board definitively closing the door on a sale or joint venture of their radio assets to Macquarie Radio Network''.
For the amount he was prepared to pay for the radio assets, ''I could buy a significant amount of all the assets of Fairfax at a far lower price to earnings multiple,'' he said, adding: ''With my preferred direct route closed, I have decided to pursue another path.''
Mr Singleton said he and Mr Carnegie had met with Mrs Rinehart after forming the consortium to buy shares in Fairfax, and ''it was clear to me from the start that there was a mutual interest in working together''.
He said he had been on the board of Fairfax some two decades ago when the group created its charter of editorial independence.
He and Mrs Rinehart believed that the lifeblood of Fairfax was the integrity and accuracy of its journalism, but there was no reason why a group of ''eminent and experienced Australians'' should not review the charter to assess ''its relevance for today''.
A Fairfax spokesman on Friday night said the group had no comment.