THE gloves have come off in the battle for control of Fairfax Media with major shareholder Gina Rinehart and the company exchanging increasingly personal salvos about their differences, and the future of the company.
In a flurry of heated exchanges yesterday afternoon, prompted by this week's Fairfax rejection of Mrs Rinehart's board tilt, the Perth-based mining magnate called on chairman Roger Corbett to agree to a "performance milestone" of returning the company's share price to 87? and reversing "the five-year decline in paid circulation and revenue". In a letter to Mr Corbett, she said he should resign if he failed to achieve the goals by November.
But Fairfax rejected the ultimatum. Instead, it called on her to launch a takeover for the company.
"If Mrs Rinehart wants control of Fairfax Media she must make a bid. Mrs Rinehart's letter today has once and for all unmasked her motives for her continual attacks on the company and its board," adding that the company's readers would abandon the group's mastheads "if Mrs Rinehart succeeds in this personal crusade".
Later in the evening, one of Mrs Rinehart key executives, John Klepec, took issue with the Fairfax response, saying: "Mrs Rinehart has repeatedly advised that she would not use the publications to promote her private interests only. It is hence incorrect for Fairfax to endeavour to allege that this has been a 'personal crusade'."
Mrs Rinehart had "never sought control of Fairfax," he added.
Earlier, Mrs Rinehart dismissed the board's assertion that editorial independence was the main sticking point. "Where we have differed most profoundly is not over the charter of editorial independence, contrary to much Fairfax reporting, but over how to save a business that is reportedly in danger of dying."
But the company owner of this newspaper disagreed: "Contrary to Mrs Rinehart's repeated assertions that this isn't about editorial control it is. It is also about her obtaining control of the company and not paying a premium."
Mrs Rinehart said the performance of Fairfax over the past five years had been "distressing for shareholders".
"The milestone we propose is that the Fairfax [average] . . . share price increase . . . to 87? per share prior to the AGM, which would represent only a 50 per cent loss from the commencement of your chairmanship in October 2009 . . . And if the five-year decline in paid circulation and in revenue of the Fairfax mastheads do not reverse prior to the 2012 AGM, we ask that you tender your resignation at that meeting."
Fairfax shares closed 1.5? higher at 55.5?.
But in reply, Fairfax noted Mrs Rinehart's record as a media investor. "All media stocks have been impacted by global structural and cyclical forces. It is worth noting that in the period since Mrs Rinehart has joined the TEN board its stock has traded 63.4 per cent down. In the same period Fairfax Media's stock price is down 60.6 per cent. Seven West Media is down 73.3 per cent and APN is down 64.7 per cent."
Frustrated at Mrs Rinehart's emphasis on newspaper circulation, the company underscored its audience across all platforms. "We have grown overall readership to the highest levels in the company's history. Our metro publications readership is up 26 per cent over the last five years."
Mrs Rinehart, owner of 18.67 per cent of Fairfax, said she was also concerned by the affects of the timing of the restructure and 1900 job losses, saying the "sprawling [three-year] time-frame can lead to staff demoralisation and a lack of focus on a strategy for recovery".
"What is at stake is the survival of Fairfax Media."
But Fairfax dismissed Mrs Rinehart's resistance of the board's governance principles, saying they were "in keeping with normal board practice".