Billionaire mining heiress Gina Rinehart has scored a coup in her slow-burn bid for control of Fairfax, after her closest adviser and confidante accepted an invitation to join the ailing media giant’s board.
Canadian-born fast food king Jack Cowin — who admits he has never had an original idea in his life — will become the ninth member of Fairfax’s governing body as an “independent” director to proffer his stellar insights into how to run the former newspaper company.
Cowin has no direct digital media experience, having built his fortune adapting fast food brands for the Australian market. But he has some familiarity with the general industry, having served on the Network Ten board since 1998 and through the negotiation of ad deals for his fatty American-style snacks over four decades. Rinehart has sat on the Ten board with Cowin for the last two years.
Fairfax chairman Roger Corbett, the former Woolworths chief and successful grocer, said in the company’s official release that Cowin — who, like Corbett, doesn’t hold a substantial stake in the firm — would act as an “independent” director “on the same basis as other directors”.
Corbett said in statement this morning that “neither Mr Cowin or Fairfax Media consider his appointment as being indicative or connected to the potential outcomes of the company’s inconclusive discussions with Hancock Prospecting”.
Rinehart, the richest woman in the world, has teamed up with her good friend to use her strategic stake to increase control of Fairfax and return it to profitability. She has declined to move to over 20% of the company, which would have required her to submit a takeover bid, and has also resisted signing up to the company’s hallowed charter of independence.
In May, Rinehart pushed for Cowin to be one of two directors elected on the basis of her growing stake in the business. She has since expanded the demand to three board positions, with one reserved for Cowin as an independent.
Last month, Rinehart reduced her stake in Fairfax from 18.7% to 14.99% by selling shares to fund manager Perpetual, ostensibly to qualify for directors’ insurance if her bid for two seats was eventually successful. At the time, she reiterated her demand that an “independent” director be appointed. Over this period, Cowin, who according to BRW is worth $618 million, was directly negotiating with the Fairfax board on behalf of Rinehart as a self-described “Henry Kissinger of shuttle diplomacy”.
Rinehart recently joined Cowin’s 70th birthday celebrations onboard his $50 million 60-metre superyacht Slipstream, moored off the coast of the idyllic French holiday hamlet of St Tropez. He is currently overseas and could not be contacted this morning.
Media analyst Peter Cox told Crikey that Cowin “was only a young chicken at 70, he’s got some experience in the media and building businesses that have made a lot of money”.
“But really, the move has to be to appease Gina,” he said.
Cowin’s private company — Competitive Foods — owns the rights to local Burger King offshoot Hungry Jack’s as well as KFC stores in Western Australian and Northern Territory, and is a majority shareholder in wage-cutting pizza proprietor Domino’s.
There remains only one director with extensive real world journalism experience on the Fairfax board — CEO Greg Hywood. Peter Young is an investment banker, Linda Nicholls worked for Australia Post, Sam Morgan is a web entrepreneur, Sandra McPhee is a professional director, Michael Anderson was a marketing executive (turned radio CEO) and James Millar is a trained accountant. (In late May, Millar replaced Bob Savage, a computer salesman.)
Cox said Fairfax should expand the board to “include more people with relevant experience and expertise in digital media … I don’t think there’s one person on there currently that has that”.
Fairfax has a provision under its constitution to expand its board by a further three positions to 12. However the board had previously restricted the current maximum to nine, suggesting Rinehart would have to have a word in Cowin’s ear to fulfill her destiny.
Fairfax shares were flat this morning at 56.5 cents against a 1% jump in the broader market.