Fairfax Media shares fell by more than 9% today after mining billionaire Gina Rinehart sold her entire holding for an average 86.75 cents each, well below market prices, because she was unhappy with management.
Rinehart began buying into Fairfax Media in late 2010 and by February 2012 she was the biggest shareholder, with 14.99%.
However, her position as a substantial shareholder was troubled with the board of directors blocking her from a seat on the board. Instead, her friend Hungry Jack’s founder Jack Cowin, was appointed as a compromise.
He is to remain on the board despite his friend’s exit from the share registry.
Rinehart sold here entire holding for about $300 million, a small profit or close to breaking even on her original investment.
John Klepec, chief development officer of Rinehart’s Hancock Prospecting, said: “We have come to the conclusion that the senior leadership of Fairfax Media has no workable plan to revitalise the company and address the declining business and circulation numbers. A series of bad decisions made by the leadership team has instead increased the number of publication errors and reduced the company’s performance to cover news to standards expected to maintain the credibility of some of the oldest and finest newspaper mastheads in the country.”
Portfolio manager Simon Mawhinney of investment group Allan Gray, which has a 5.67% of Fairfax, said: “Her (Rinehart) ownership in Fairfax hasn’t been a source of instability for some time and I very much doubt her decision to sell her shares will impact Fairfax’s future at all.”
The Sydney Morning Herald, a Fairfax-owned title, was reporting a source close to Fairfax as saying: “We expect Mrs Rinehart’s investment in Fairfax Media has been one of her better media investments.”
Rinehart has a 10% holding in troubled free to air television network Ten.
Today Fairfax shares are down 9 cents to 87 cents, about the level Rinehart sold her stake for.
(Disclosure: Allure Media, the publisher of Business Insider, is 100% owned by Fairfax Media.)
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.