Rinehart Likely to Control Fairfax within Six Months

Industry analysts predict that mining magnate Gina Rinehart will take control of Fairfax Media within the next six months. The prediction comes after Rinehart’s open letter criticizing Fairfax chairman Roger Corbett.

Michael Peters, a lecture from UNSW Australian School of Business, said Rinehart can take about six months of maneuvering before she can take control of Fairfax. He added that should Rinehart decide to walk away, the share price would likely decline.

Rinehart has about 18 percent share in Fairfax and has launched its campaign to get three seats from the Fairfax board.

Corbett, however, has consistently refused, saying the board does not agree with Rinehart over issues of editorial independence and governance principles. The board directors also want the mining magnate to sign the editorial independence charter before it offers any position in the board.

Peters said that Rinehart may take about six months of wrestling and jockeying for the seats, which may result to shareholders losing confidence. Selling her shares would also be unacceptable.

Her open letter to Fairfax may not also be a welcome move. Peters said that Rinehart is basically threatening the future of Fairfax and that Rinehart is acting like only she can save the company.

Fairfax Media recently announced that it is cutting about 1,900 jobs. The move was decided to help better manage the business, which has suffered in the last few years because of advertising sales decline.

More and more consumers are also shifting online for digital products. Fairfax is also moving to have a bigger focus on digital publishing.