FOR iron ore billionaire Andrew Forrest, Gina Rinehart's move this week to become Fairfax's largest shareholder is nothing if not serendipitous. For the mega-wealthy, control of Australia's most influential newspaper group, Fairfax, is like an insurance policy against political decisions that run against their commercial interests.
Rinehart has paid less than $200 million for this insurance and while she probably will have to pay more, the investment could yield a hefty return.
According to well-placed sources Rinehart was not the only candidate running the ruler over Fairfax - Forrest and his mate Kerry Stokes were sniffing around as well.
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Over on the east coast of Australia another astute investor, Peter Hall from Hunter Hall, was also taking a very keen interest in Fairfax.
His fund was not looking for a big stake but he was prepared to take a $10 million punt that either Rinehart or Forrest would.
He thought Fairfax stock was undervalued late last year but figured he had an insurance policy if Fairfax's prospects went pear-shaped. Hall's own insurance policy - the emergence of a billionaire seeking influence - paid off.
Just in time, too. Hall was getting more concerned about the media group's advertising and readership numbers in December and January. Hall sold his shares in Fairfax to Rinehart this week.
Kerry Stokes may have also had an agenda. Sure, influence would have played a significant part in the appeal of Fairfax and he is a big holder of iron ore assets. But he has also made plenty of money out of media over the past 30 years and has other properties - such as the Seven television network and West Australian Newspapers (WAN) - which could have dovetailed nicely with the country's largest independent news publisher.
For Rinehart and for Forrest the rationale is simple. Invest several hundred million to gain control of Fairfax, and wrest the political agenda from the government.
Read more: http://www.smh.com.au/business/fairfax-bid-is-it-insurance-or-a-minefield-20120203-1qxsn.html#ixzz1lNV0bAiW
13 comments:
For those who have the misfortune of living in the USA at the moment have a read of this LA Times article and see how high the German standard of living is, especially when it comes to healthcare and education.
http://articles.latimes.com/print/2012/jan/22/business/la-fi-germany-middle-class-20120122
Me, I agree with the Bearish scenarios in most cases, stated on many Blogs etc, as their simple math does not lie, and we are in the bursting of a 30 year credit bubble. But that has almost nothing to do with markets a lot of the time, a fact which confuses many people.''
I agree 100% with that. You have to trade the markets off the charts and nothing else. However many times it's said, it bears repeating.
The more difficult question which does involve macro (unless you're in a safe country like Canada or Norway) is:
a) How much of my liquid wealth do i allocate to a stock trading account?
and b), the real kicker:
What measures do I take vis a vis possible serous problems in my own currency: buy gold, silver, other currencies, real estate? That question has a lot of bite if you live in Spain or the UK in my opinion, and much less bite if you live in Canada.
Mark's January letter:
http://paladinfunds.com/media/PDF/2012_January.pdf
Excellent, transparent and no-BS. He's very self-critical, which is refreshing. By the sound of it you'd think he had a terrible month, but in fact he's even since inception.
Thanks Mugabe you are so right about A and B. I will look at Mark's January letter as I have about 10k I still want to invest.
What me Worry? It is a shame that so many American's don't know what they are missing and mistrust of our gov't is so ingrained that they refuse to pay taxes. We actually vote against our own self interest. It's like make things more affordable, but "don't tax me, don't tax thee, tax the man behind the tree."
I hope Fairfax Media doesn't get corrupted by a billionaire's corporate money. One thing I liked about the Australian print media scene was that even though it was a duopoly across all the capital cities of the nation, the two big players -- Rupert Mordor vs. Fairfax -- were ideologically opposed to each other. Disgustingly reich-wing with Murdoch vs. tepidly left of centre with Fairfax.
That was better than in Canada, where ALL the papers are owned by a single right-wing corporation. That's why I don't subscribe to any of them. And in the U.S., the ideological tone of all major newspapers ranges from disgustingly authoritarian to mildly corporatist. Ditto for the non-subscribing to them.
The trouble is, when a rich guy puts his money in something, he wants to steer it. And a guy who got rich fromravaging the earth is not going to be a bunny-hugger. Not that Australia needs anyone who likes rabbits! Let's see how that goes, eh?
Hey QB -- I "friended" you on Skype last night. Have you turned on your televisiphoneputer today?
No I haven't. I will turn it on soon. If I make it I will be voice only. I don't have a camera on my old laptop.
It's all set and I will just leave myself on all day.
Mugabe your comment earlier about the tape is so true. The market seems disconnected from the macroeconomic reality that is happening all over the world.
February 4 and it is 80F. Winter just missed us completely and I really look forward to the cool weather. I think we had about 4-5 days of it.
Too bad it's not video. I thought it would be cool if your face could join our party, like a trans-continental disembodied talking head! It would be so 21st Century...
Keep in mind that I'm so primitive (and paranoid of the tracking capabilities) that I don't own a cell phone. But we still like to be face-to-face with people in far-away countries. Especially because it's free.
I do not know what it is but super rich Aussies are really ugly. Apart from the lovely Gina and her dad just think of Kerry Packer too
Kerry Packer's soul was as ugly as his exterior, for sure.
"I have watched it, it is a weird mixture of good and bad. The bad being the sharks, really, who are a part of what is wrong with modern 'capitalism'.
When the solution to every cost problem is 'Make it in China!' your country is doomed.
Apple is not even the worst offender in China, as Shaza said, and there is a story today about "thousands line up for FoxConn jobs in China despite bad publicity". When you need a job, you need a job - and the Chinese have no shortage of poor unemployed.
Yet companies are now starting to move out of China on cost pressure, to cheaper climes like Vietnam and Indonesia - countries with lots of poor eager workers.
India should see the most growth, with the largest population base, but their problems with poverty and infrastructure are immense and they look poorly managed.
Africa will be the final frontier, then they will have to get their cheap goods made in orbital factories or on lunar industrial parks or on busienss friendly Mars."
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