Fairfax bid to block Walker has support

(AAP) - John B Fairfax is believed to have the backing of at least two fund managers in his bid to block the re-election of Fairfax Media Ltd chairman Ron Walker and seek an urgent renewal of the publisher's board.

Mr Fairfax wants Mr Walker to go after years of under performance by the group, so
fresh blood can take advantage of an opportunity to leverage a slimmer cost base to
begin a process to restore shareholder value.
In a stunning statement, Mr Fairfax and his son Nicholas declared their private
family company Marinya Media would be voting against Mr Walker's re-election at
Fairfax's annual general meeting in November.
The pair, both Fairfax directors, took umbrage at Mr Walker's statement to The
Australian Financial Review newspaper in an article published on Thursday that he
intended to retire as chairman in the second half of 2010.
"Mr Walker is well aware of significant shareholder dissatisfaction with his tenure
as chairman," they said in a joint statement a few hours later.
"Marinya, for one, cannot see how Mr Walker's stated intention to delay his
retirement assists the company or its shareholders.
"It unnecessarily defers the commencement of the much needed process of board and
leadership renewal and we consider it inappropriate that a departing chairman would
be influential in the choice of new directors."
John B Fairfax said separately the decision to vote Marinya's 9.7 per cent stake,
other shares controlled by them and any open proxies held, against Mr Walker was
"uncharacteristic", but not done lightly.
"It is not personal," he said.
But he and Nicholas Fairfax stressed board renewal must start "today".
The decision comes a month after the Fairfax board elected Roger Corbett as its
deputy chairman.
Mr Corbett, a former head of retailer Woolworths, also serves on the boards of the
Reserve Bank of Australia and Wal-Mart Stores Inc.
At the time, Mr Walker said the appointment was part of the company's ongoing board
renewal program, fuelling speculation Mr Corbett could soon replace him.
However, John B Fairfax could also be a contender.
Investors and fund managers Lazard and 452 Capital are believed to be backing
Marinya's move.
Fairfax in August announced a statutory net loss of $380.1 million for fiscal 2009,
after it wrote down the value of its mastheads in one of the toughest markets for
media groups in years.
Fairfax shares closed on Thursday up 4.5 cents at $1.72. When Mr Walker was elected
chairman in August 2005 the stock was trading around $4.01. It hit an all time low
of 79.5 cents in March this year.
A Fairfax Media spokeswoman said the company had no comment and that Marinya's move
was a matter for the board. Mr Walker could not be reached for comment.
John B Fairfax and Nicholas Fairfax said new leadership would ensure a unified board
that could function effectively and provide "sound" strategic direction.
"We do not believe that the current board under the leadership of Mr Walker meets
these tests and, for several months, we have been urging the board of directors of
Fairfax Media to recognise the need for board renewal," they said.
They also allege "inadequate attention had been paid to matters of corporate
governance" and that "an unacceptable degree of risk" was introduced to the
company's capital structure through a series of debt funded acquisitions during Mr
Walker's tenure.
John B Fairfax said the pair believed voting against Mr Walker was in the best
interests of all Fairfax shareholders.
"We do not do this lightly," he said.
Marinya became a stakeholder after Fairfax's $2.9 billion merger with Rural Press in
2007.