Gina Rinehart, Australia’s richest person, has bankrolled former Seven media executive Bruce McWilliam’s acquisition of an almost 10% stake in Southern Cross Media, which owns the Seven Network, the Triple M and Hit radio brands and West Australian Newspapers.
While the unusual arrangement – worth about $26m – does not give Rinehart a direct stake in Southern Cross, she could take control of the shares if McWilliam breaches the terms of their deed, which was published on the ASX on Wednesday.
The agreement puts the billionaire mining magnate back in the media game after a brief foray more than a decade ago when she bought a 10% stake in the Ten Network and a 15% stake in Fairfax, but exited both.
Fairfax Media, publisher of the Sydney Morning Herald and the Age, merged with Nine in 2018 to create a Australia’s largest integrated media player.
Australia’s media market is already dominated by another billionaire, Rupert Murdoch, whose News Corp Australia is headquartered in the US but owns the majority of mastheads in Australia as well as Sky News Australia.
West Australian billionaire Kerry Stokes is the largest shareholder in Southern Cross Media, which was created when his company Seven West Media merged with Southern Cross earlier this year. The company owns Perth’s West Australian, the Weekend West, thewest.com.au and digital network PerthNow.
Sign up for the Breaking News Australia emailStokes exited as chair after the merger but his family retains a 20% share of the company.
The McWilliam/Rinehart investment represents the second-biggest slice of the Southern Cross media empire behind Stokes’ share.
Documents filed with the ASX on Wednesday reveal that Rinehart companies provided most of the money behind the recent purchase of a 9.73% stake in Southern Cross by McWilliam.
According to the documents, Hancock Prospecting and a long list of subsidiaries has a “relevant interest” in a combined 9.5% stake in Southern Cross Media. Rinehart is considered a substantial shareholder because her finance company has the power “to control the disposal of the shares” as set out in an agreement with McWilliam on 16 April, and has “voting power” worth 9.5%.
McWilliam, a former commercial director at Seven West Media and confidant of Stokes, bought up $11.2m and $14m worth in shares in recent weeks, largely financed by Rinehart’s loan.
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