Date: July 06 2012
Gina Rinehart last night offloaded $50 million worth of shares in Fairfax Media, but the mining billionaire insisted the move was aimed at removing a key obstacle to joining the company's board.
The partial sale comes amid a stand-off between Mrs Rinehart and Fairfax over her push to secure at least two board seats of the newspaper and internet group. While she remains Fairfax's single largest shareholder, the world's richest woman insisted she had no plans to mount a multi-billion takeover of the publisher of The Canberra Times.
Mrs Rinehart's private company, Hancock Prospecting, offloaded 86.5 million of the media company's shares last night to take her holding below 15 per cent.
The developments come just days after the board of Fairfax rebuffed Mrs Rinehart's bid for a seat because she declined to agree to its charter of editorial independence.
But a statement issued by Hancock Prospecting said the selldown had been aimed at meeting rules surrounding a corporate insurance policy held by Fairfax, designed to protect directors against being sued by disgruntled shareholders.
The policy, which is common throughout business, does not cover directors that have more than a 15 per cent stake in the company.
''The [share] sale was completed to resolve an issue that arose concerning the Directors and Officers Insurance Policy, in the situation of a director having a greater than 15 per cent shareholding in Fairfax,'' the statement said.
It added that the insurance issue was one of the ''key issues'' recently raised by Fairfax chairman Roger Corbett in Mrs Rinehart's quest to join the company's board.
It said this outstanding issue needed to be resolved by either the chairman authorising to raise the 15 per cent limit, ''which has been able to be reasonably achieved by other companies'' or by reducing the holding under 15 per cent.
''Given the chairman did not undertake the former; we have taken the latter and sold in a single tranche to minimise any market impact,'' the statement said.
Before last night's selldown, Mrs Rinehart's holding in the company peaked at 18.67 per cent. The statement renewed Mrs Rinehart's call for two seats on the board of Fairfax plus the appointment of an independent director, but said she was not seeking control of the board.
''We … deny unsubstantiated rumours spread by others, that we are about to 'make an offer' for the company.''
Fairfax last night declined to comment. However it is believed directors remain concerned about Mrs Rinehart's refusal to endorse editorial independence. Some directors also believe she is seeking effective control of the company.
Mr Corbett last week said agreement with Mrs Rinehart could not be made ''on terms unacceptable to the company''. Fund manager Perpetual, which acquired the entire share tranche sold by Hancock, declined to be drawn on whether Mrs Rinehart should be offered a seat on the Fairfax board.
Fairfax shares yesterday closed half a cent higher at 58.5c. with Kirsty Simpson
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