Shareholder Says Fairfax Unlikely to Meet Rinehart Share Price Target Demand of 87c Before Nov Annual Meet

Due to so much negativity surrounding Fairfax Media, a major shareholder said on Tuesday that the ailing company would likely not meet the challenge made by Gina Rinehart, the firm's largest shareholder. Ms Rinehart, who holds a 19 per cent stake, dared the company chairman, Roger Corbett, to boost the share prices to 87 cents ahead of Fairfax's yearly meeting in November.

Simon Marais, who holds an 8.29 per cent stake and is the fund manager of Allan Gray, admitted that Ms Rinehart's challenge for Mr Corbett to boost stock prices or resign was a tall one. He said that given the short period to increase company shareprices from the current 59 cents, the only way to go is sell the stocks.

"What they can do is make sure they don't get caught like they did last time when they were basically saying the future will be just like the past, and didn't realise they had to make some serious changes to the way they run the business," The Australian quoted Mr Marais.

Ms Rinehart, Australia's richest woman, demanded from Mr Corbett to shape up or ship out of Fairfax after the media firm's board rejected her bid to be given three seats, be appointed deputy chair and have the power to hire and fire editors.

The board thumbed down her demands despite threats to dump her stake in the market for fear that she would compromise Fairfax's vaunted journalistic integrity. Ms Rinehart insisted that she only wanted to improve the company's sustainability, which she stated in her first letter to Fairfax.

"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," WA Today quoted Ms Rinehart's letter.

The company likewise thumbed down Ms Rinehart's challenge, saying her ultimatum revealed her real motive.

"Mrs Rinehart's letter today has once and for all unmasked her motives for her continual attacks on the company and its board," Fairfax said in a statement. The company warned that readers would abandon its mastheads if the world's richest woman succeeds in her personal crusade.

Ms Rinehart pointed that Fairfax performance over the past five years was distressing for shareholders, citing declining advertising income and circulation figures. Mr Marais agreed with Ms Rinehart's charge that Fairfax has been slow in responding to market challenges.