Activist shareholders John Singleton and Mark Carnegie, still pushing for reforms to Qantas Airways Limited’s (ASX: QAN) strategy, have another target in their sights.
Now The Australian reports that the pair are seeking support from Fairfax Media Limited’s (ASX: FXJ) second-largest shareholder, Allan Gray – a funds management company with an 11.4% holding in the newspaper publisher. Mr Singleton and Mr Carnegie have also agreed to consult with Fairfax’s largest shareholder, Gina Rinehart, on key matters affecting Fairfax.
Gutenberg Investments Trust, which is linked to Mr Singleton and Mr Carnegie, bought a small 0.15% stake in Fairfax in December 2012, and is likely to push for a strategy overhaul within Fairfax. Ms Rinehart has been agitating for change for some time already, including suggesting that current chairman, Roger Corbett should leave.
Mr Singleton and Mr Carnegie, who own controlling stakes in Macquarie Radio Network Limited (ASX: MRN), may be interested in acquiring Fairfax’s radio stations, after failing in a previous attempt.
Allan Gray’s Simon Marais has told the newspaper that he was open to the idea of selling those radio assets at a good price, following Fairfax’s sale of its remaining 51% stake in New Zealand auction site, Trade Me Group Ltd (ASX: TME). He added that he was concerned that Fairfax bought technology investment company Netus, just days after the Trade Me sale, suggesting it was the wrong decision and Fairfax should stick to its knitting.
Analysts have been critical of the Fairfax board in the past for not selling off non-core assets like Trade Me and its radio stations, as well as other assets it holds. The sale of Trade Me was a step in the right direction, but clearly some shareholders feel the board could do more to improve shareholder value.
It’s unlikely that we’ll see a full blown takeover bid for Fairfax, but if the activist shareholders can gain the backing of both of the company’s two largest shareholders, Mr Singleton and Mr Carnegie will have some significant say in Fairfax’s future. Whether it’s a good thing for other shareholders remains to be seen.
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Motley Fool writer/analyst Mike King owns shares in Fairfax. The Motley Fool’s purpose is to help the world invest, better. Take Stock is The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it’s still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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