Media analysts have said the response to Gina Rinehart's bid for a 15% stake in Fairfax Media is “hysterical”, while her buyout may increase the share price another 15% to at least $1.
Fusion Strategy managing director Steve Allen believes the reaction to Gina Rinehart's interest in Fairfax Media on top of her current 10% share of Network Ten is a sign of instant “hysteria”.
“She doesn't have an influence on the news agenda at Ten Network as we speak and it's even more difficult at Fairfax because for 175 years it's been a company where it's church and state. Fairfax is a classic model of a company with editorial independence.”
MagnaGlobal managing director Victor Corones agrees: “I think it's highly unlikely. Anyone in her position is open to scrutiny, so trying to influence outcomes in setting the news agenda is going to be tricky. It's hysteria at this point in time.
“I think companies like Fairfax would be aware of her agenda and would hopefully put clear guidelines in place for editorial integrity.”
Pulse Markets managing director Hamish McCathie disagrees with Allen and Corones saying that the current hysteria is fair: “She's a very wealthy woman and given her mining interests there is a big chance she will be trying to have an influence setting the news agenda.”
Despite suggestions there has been an overreaction to her bid, the stockmarket has reacted favourably for share holders, with the price increasing 10.14% yesterday to 81.5c.
McCathie said: “There has been a huge increase in the volume of the shares and they will continue to go up. I can see them increase another 15% to $1.”
Fairfax shares sat at 74c before closing at 81.5c% yesterday, matching Rinehart's 81.8c per share offer. Rinehart yesterday made a bid to increase her holding in Fairfax by 9.9%.
It has since come to light that Rinehart has now secured just under 15% of the company, in a $200 million raid that will most likely see her jostle for a seat on the Fairfax board.
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