Bidding war for Australia’s Kidman estate escalates

By Aidan Fortune contact

- Last updated on GMT

Related tags: Australia, Beef, Livestock

S Kidman & Co is currently weighing up two bids for the 77,300sq km estate
S Kidman & Co is currently weighing up two bids for the 77,300sq km estate
A consortium featuring four of Australia’s largest cattle families have put forward an AU$386m bid for the Kidman estate.

The bid has been submitted by the BBHO consortium which includes Sterling Buntine, Tom Brinkworth, Malcolm Harris and Vic Oldfield, all experienced cattle farmers.

Their bid tops a previous AU$365m offer from billionaire Gina Rinehart of Hancock Processing and Chinese investors through the Australian Outback Beef (AOB) joint venture that has been accepted by S Kidman & Co but was awaiting government approval.

However the Hancock-AOB bid doesn’t include two properties on the estate, making the two offers roughly equal.

The estate, which measures 77,300sq km, is the largest in the country, reaching into Western Australia, South Australia, Queensland and the Northern Territory. It makes up 1.3% of Australia’s land area.

If the BBHO consortium offer is accepted, the estate is expected to be split among the four families. This was previously a deal breaker for S Kidman & Co.

Given the bid has come from a consortium made up of four Australians, it would not require approval from the Foreign Investment Review Board (FIRB) which is anxious to keep it in domestic ownership, partly due to the fact that part of the property falls within a military weapons testing range. This puts it at an advantage over the Hancock-AOB bid, as Chinese-owned Shanghai Cred would own a third of the estate.

Scott Morrison, treasurer of the Commonwealth of Australia, had deemed previous offers from overseas investors to be “contrary to national interest”​.

Gary Korte, CEO of the Hancock Group, said the Hancock-AOB bid should be approved rather than the BBHO offer as it would keep the estate whole. “The Kidman shareholders, the Kidman board and the Kidman management team made it clear to all bidders from the time we entered the process that they were not interested in bids that would see the Kidman business broken up. We will not break up the Kidman properties or the Kidman business in any substantial way and we will encourage the Kidman heritage and legacy to be maintained.”

He also criticised using foreign ownership concerns as a reason for blocking the deal. “The Hancock JV bid is an Australian bid – you don’t get much more Australian than fourth-generation Australian Gina Rinehart, so let’s not start to pretend otherwise.

“The Hancock JV reduces the level of foreign ownership. It is hard to understand criticism of the Hancock JV bid structure, when, if we are successful, the level of foreign ownership will actually drop from the current level of 34% held by foreign shareholders to 33% under the Hancock JV. For all the politicking there haven’t been too many people deeply concerned over many years with the existing Kidman foreign shareholding.

“A break-up of the 100-year legacy started by Australia’s iconic Sir Sidney Kidman would be very sad and definitely not what he would have wanted after so much effort.”

Related topics: Business, Oceania, Supply chain, Meat

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