Mining billionaire Gina Rinehart has dumped part of her stake in Fairfax Media amid an ongoing battle over boardroom seats.
Mrs Rinehart's mining company Hancock Prospecting sold 86.5 million shares for A$50.1 million to an Australian fund manager minutes after the market closed at 1600 AEST on Thursday.
The move reduces her stake in the troubled media company, which owns The Sydney Morning Herald and The Age newspapers, from 18.7 per cent to about 15 per cent.
However, she remains Fairfax's biggest shareholder.
Mrs Rinehart is locked in a battle with Fairfax chairman Roger Corbett over securing three board seats.
They have been in a stand-off over Mr Corbett's desire for Mrs Rinehart to sign the media company's charter of independence before any offer to join the board is made.
He also wants Mrs Rinehart to agree not to sue fellow board members.
Fairfax's professional insurance policy, which is designed to offer legal protection to board members, does not apply to shareholders who hold more than 15 per cent of Fairfax shares.
In a statement, Hancock Prospecting said that as Mr Corbett had not raised the 15 per cent limit, Mrs Rinehart's company had decided to offload some shares to reduce her stake.
While the sale was officially about insurance issues, analysts have interpreted it as an aggressive move against the Fairfax board.
CMC Markets' chief market strategist Michael McCarthy acknowledged the insurance issue but said he saw it as a fascinating "shot across the bows".
Apart from Hancock Prospecting, which is chiefly a mining company, nobody else was interested in acquiring Fairfax at the moment, he told AAP.
That meant Thursday evening's move was bad news for shareholders and good news for Ms Rinehart's prospects of possibly bidding for the whole company.
"They've played hardball with her, she's been forced to sell down and it's game on here," he said.
"It's quite possible the current board could be the losers out of this."
Fairfax's share price is about two cents weaker than when Ms Rinehart bought much of her stake, meaning Hancock Prospecting has incurred a loss of more than $1.7 million.
The shares were sold for A58 cents, just off their close of 58.5 cents.
The stand-off between Mrs Rinehart and Fairfax over her push to join the board has escalated in recent weeks, with the billionaire calling on Mr Corbett to resign if he fails to turn around the company's ailing share price, revenue and circulation by November.
Hancock again denied on Thursday it was about to make a takeover bid for Fairfax, but renewed its calls for Mr Corbett to commit to meeting the performance milestones.
"We continue to monitor the performance of our investment in Fairfax, noting that the shares are trading at record or near record lows, which is an independent assessment of the chairman's performance," the statement said.
"We again urge the chairman to tell concerned shareholders that he will accept proposed milestones regarding his performance in the interests of Fairfax and its shareholders, or propose other reasonable KPI (key performance indicators) to meet for the continuance of his chairmanship past the AGM (annual general meeting) in November 2012."