Cowin's Fairfax board seat will help Rinehart, say analysts

By By Alexandra Roach | 20 July 2012
Gina Rinehart

The appointment of Hungry Jack's owner Jack Cowin to the Fairfax board is a "step in the right direction" for the troubled media company and will assist Gina Rinehart in her bid for her own seat, argue analysts.

Cowin, who does not own a stake in Fairfax, was appointed to the board yesterday after what chairman Roger Corbett described as months of discussions.

“Cowin's [appointment] is a step forward in the right direction for Fairfax,” Pulse Markets managing director Hamish McCathie told AdNews.

“Cowin has a lot of experience in  the media industry as an investor, director, board member and buyer,” Steve Allen, managing director at Fusion Strategy, said.

Hungry Jack's founder Cowin is a director of Network Ten, alongside long-time friend Rinehart, who was refused Fairfax board representation last month after talks broke down.

But Allen warned Cowin's board appointment is not only about Rinehart, who is Fairfax's largest shareholder with a 14.99% stake in the company.

“Cowin is a consummate businessman and deal-maker,” Allen said. “His getting a board seat seems to be an olive branch to Rinehart, at least in part, but he is not a Trojan Horse sent in solely so she can get a board seat.

“But you'd have to deduce [Fairfax chairman] Roger Corbett and the rest of board have decided it's a bit unsightly to have open warfare with their biggest shareholder being splashed across the press every day. But they also need someone with Cowin's experience.

“Fairfax seemed to believe for a long time they were geniuses who did not need extra help but the rest of market doesn’t agree, as the all time lows in the share price shows. In fact, the one person who has waded in and bought shares, and in large numbers, is Rinehart.”

McCathie said the addition of Cowin to the board will help both Fairfax and Rinehart. “I don't think Rinehart will give up on getting a board seat. She and Cowin are like-minded people so his appointment to the board may help her get a board seat in the future.”

Allen said: “The two sticking points against Rinehart getting a board seat were the size of her stake interfering with the directors' insurance policy and that she would not commit to the Editorial Charter. She sold down her stake, which fixed the first problem.

“Cowin agreed to the Charter. He was prepared to agree to it and he got the seat. The next logical step is Rinehart agreeing to it as well.”

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