Australian-Chinese consortium bids for Australian ranches
Australian mining billionaire Gina Rinehart has joined with a Chinese company to bid 365 million Australian dollars (US$277 million) for S. Kidman & Co., Australia’s largest cattle ranch.
The offer for the vast farming operation straddling tens of thousands of square kilometers is subject to approval by regulatory authorities and Treasurer Scott Morrison, who earlier this year stood in the way of an offer for Kidman from a consortium headed by a Chinese conglomerate.
In a statement Sunday, Ms. Rinehart’s Hancock Prospecting Pty. Ltd. said a deal with Kidman had been reached that would see her company control 67% of the cattle-ranch empire and Shanghai Cred Real Estate Stock Co. the remaining 33%. Shanghai Cred was part of the consortium that earlier failed in its bid to buy Kidman.
Foreign ownership of Australian assets has become a hot topic politically. The government has repeatedly stated the country’s openness to foreign and, specifically, Chinese investment, but has faced internal pressure from the Nationals party, the junior partner in Prime Minister Malcolm Turnbull’s conservative ruling coalition, to oppose farm takeovers.
Kidman in May said China-based Dakang Australia Holdings andAustralian Rural Capital Ltd. had dropped a US$287.3 million offerafter Mr. Morrison raised national-interest concerns. Dakang Australia is controlled by Shanghai Pengxin Group Co., which tried to buy the company outright last year only to have the government block the deal because Kidman’s largest property, Anna Creek station, abuts a strategic weapons-test range. The current deal doesn’t include that station.
In August, Canberra decided to block two bidders, from Hong Kong and mainland China, from taking a controlling stake in the country’s largest electricity network in the face of concerns raised by lawmakers about national security.
Kidman has leases covering 101,000 square kilometers in South Australia, Western Australia, Northern Territory and Queensland. It is one Australia’s biggest beef producers, with an average herd size of 185,000 cattle, exporting to the U.S., Japan and Southeast Asia. The landholding went on sale almost 18 months ago.
Founded in 1899 by Sidney Kidman and remaining a family-owned company since, Kidman is an iconic cattle business, Ms. Rinehart said. The acquisition would add greatly to her investment in cattle operations, which are dwarfed by her iron-ore mining operations in Western Australia state.
It “is an important part of Australia’s pioneering and entrepreneurial history,” she said.
In the statement, Kidman said a deal is conditional on the separate sale of its Anna Creek station and Peake properties by Kidman to other Australian interests. The proceeds would be retained in Kidman. Hancock Prospecting and Shanghai Cred through their Australian Outback Beef Pty. Ltd. joint venture would buy the rest of the cattle empire.
The deal would also need the approval of the various states over which the landholdings are spread, as well as the green light from China’s government, the companies said.
Kidman has agreed to pay a A$3.8 million fee to Hancock Prospecting and Shanghai Cred, under certain circumstances, if it accepts a rival offer, they said.
“Ms. Rinehart’s Hancock Prospecting Pty. Ltd. said a deal with Kidman had been reached that would see her company control 67% of the cattle-ranch empire and Shanghai Cred Real Estate Stock Co. the remaining 33%. Shanghai Cred was part of the consortium that earlier failed in its bid to buy Kidman.”
oh, gina wants it..i feel so much more secure knowing that.. *sarcasm
then the china company will buy her out of 18% a few years down the track and nobody will notice..