The letter, signed by John Klepec, chief development officer at Hancock, and received by shareholders yesterday, said that Hancock was seeking investors’ support for its push to force Fairfax chair Roger Corbett to agree to performance milestones, allow Fairfax board members to have a choice as to whether they agreed to an editorial independence charter, and to grant Hancock two board seats.
Hancock also wants Fairfax to “acquire the technological savvy to continue in today’s technological age,” Mr Klepec wrote.
In addition, the letter said, Hancock wanted to clarify misrepresentations about its intentions toward Fairfax.
“We have never sought control of Fairfax Media,” Mr Klepec wrote. “We have only requested two directors and an experienced independent director, which even if combined is clearly a minority position on the board.”
He referred to the current board's “exceedingly little skin in the game”, noting that Fairfax’s directors owned a total of 0.15 per cent of the company and that Mr Corbett individually owned 0.004 per cent. With 15 per cent of the company, Hancock is Fairfax’s largest shareholder.
“We are concerned that the process of being invited onto the board has taken many months and that during this period Fairfax has continued to decline and its chairman, with his diminutive shareholding, has continued not to purchase more Fairfax shares to demonstrate his faith in his and the board’s control and direction,” the letter said.
Mr Klepec invited Fairfax shareholders to correspond with him directly at a Hancock Prospecting email.
A Fairfax spokesman said the letter added nothing new to matters in the public domain.
Last month Fairfax appointed Jack Cowin as an independent director, in what was seen by some as the offering of an olive branch to Hancock. Mr Cowin had been put forward by Ms Rinehart but at the time of the appointment Mr Corbett said that Mr Cowin's appointment was not "indicative or connected to the potential outcomes of the company's inconclusive discussions with Hancock Prospecting".
Fairfax has so far refused Ms Rinehart's request for board representation, citing her refusal to agree to the board's governance principles, one of which enshrines editorial independence.
There has been speculation that Ms Rinehart hoped to use a position at Fairfax to influence debate on the mining tax and other government issues, although in a statement to the ABC’s Four Corners program in June, Hancock said that it had hoped Ms Rinehart would be viewed as a white knight for the ailing media company.
Fairfax recently announced a major restructure involving the loss of 1900 jobs, slimmed down metro newspapers and a heavy focus on digital publishing.
Fairfax shares closed up nearly 1 per cent yesterday at 52 cents each, above last week's record low of 49.5 cents.
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