I am about halfway through Adele Ferguson’s excellent biography of Gina Rinehart. It’s a great read, rich with the intricate details of what basically amounts to the series of fights, fallouts and disputes that have made up Rinehart’s career.
It’s not a flattering portrait at all and having read the descriptions of Rinehart’s battles with her father Lang Hancock (a dispute incredibly similar to Gina’s current battle with her own children) and her father’s third wife Rose Porteous, a common theme emerges: Gina has an almost pathological aversion to compromise.
Which is what makes yesterday’s decision to sell down some of her Fairfax stake and take her hold from almost 19% to around 15% so interesting.
If we take Rinehart at her word, this is a strategic sell-down, pitched as a sort of olive branch to the Fairfax board, led by chairman Roger Corbett.
According to Rinehart, a clause in the Fairfax directors insurance and liability rules states that a director should not own more than 15% of the company.
Rinehart has asked Corbett to lift the 15% rule – which she justifiably says has happened at other companies – but has had no success.
‘‘Given the chairman did not undertake the former; we have taken the latter and sold in a single tranche to minimise any market impact,’’ Rinehart’s Hancock Prospecting said in a statement.
In other words: We’ve done our bit, Roger. Now it’s time for you to come to the party and give us a few board seats.
According to reports in The Australian Financial Review, the Fairfax board is likely to be unmoved. It’s very, very clear that the board wants nothing to do with Rinehart, who they see as someone who will want an outsized say in editorial matters and whose mere presence will send left-leaning readers packing.
Whether that position is right or not depends on your perspective.
You’d have to think the Fairfax board is right in its assumption that readers would flee if Rinehart got board seats or potentially a greater level of control.
But with Gina’s share sale olive branch, there is an argument to say that Rinehart is trying to play by the rules. If all she wants is a say in hiring and firing editors – something that the Fairfax board’s editorial charter of independence does allow – then the board’s no-Gina policy looks a little weaker.
Of course, even Gina’s olive branches come with a few spikes.
Borrowing a leaf out of James Packer’s playbook at casino group Echo, where he relentlessly attacked chairman John Story until he resigned, Rinehart’s statement yesterday included the now customary shots at Corbett.
“We continue to monitor the performance of our investment in Fairfax noting that the shares are trading at record or near record lows, which is an independent assessment of the chairman’s performance,” the Rinehart statement said.
Clearly, these personal attacks are unlikely to soften Corbett’s resolve to keep Rinehart off the board.
It all appears to be headed for a standoff that, right now, does not seem to have a resolution in sight – particularly after Rinehart made it clear she isn’t set to make a takeover bid for the company at this stage.
Perhaps among the most likely scenarios is that Rinehart keeps sniping away, waiting for pressure to mount on the board as Fairfax’s performance continues to drift south.
But as I have said since Rinehart bought in to Fairfax, you do have to wonder why she is bothering to fight this drawn-out war.
Running a mining empire with the ambitions Hancock Prospecting has is not easy, particularly in an environment that gets tougher by the day.
The interest rate cuts out of China last night (and Europe) suggest conditions in the resources sector will get tougher, as will the task of putting big projects together.
How long with Rinehart allow herself to be distracted by this Fairfax fight?