Mining magnate Gina Rinehart has made a joint $365 million offer for the Kidman cattle empire along with Chinese company Shanghai CRED.
If successful, Mrs Rinehart’s Hancock Prospecting would own two-thirds of S Kidman and Co, and Shanghai CRED one-third – a significantly smaller stake for the Chinese party than in previous offers rejected by the federal treasurer.
Ms Rinehart said she was pleased to have the opportunity to invest further in Australia’s cattle holdings through the purchase of the Kidman stations, which comprise Australia’s largest private agricultural.
The two bidding parties have formed a joint venture company called Australian Outback Beef Pty Ltd (AOB), which has entered into a bid agreement with S Kidman.
The offer still requires various state and Chinese government approvals, and must pass Australia’s foreign investment review process.
Rival bids will also be allowed for 30 days.
The defence-sensitive Anna Creek station and The Peake are not included in the sale.
“Kidman is an iconic cattle business established more than a century ago by Sir Sidney Kidman,” Ms Rinehart said in a statement.
“It is an operation founded on hard work and perseverance by an outstanding Australian, and is an important part of Australia’s pioneering and entrepreneurial history.
“The quality of the Kidman herd and channel country properties complement Hancock’s existing northern cattle properties, and align well with Ms Rinehart’s plans to build a diversified cattle holding in Australia, taking advantage of integration opportunities,” Hancock CEO Garry Korte said.
Principal of Shanghai CRED Gui Guojie said partnering with leading local business Hancock had already proved to be a productive approach and he looked forward to having the opportunity to work with Hancock through the Kidman investment.
“We welcome the significant investment proposed in addition to the purchase price and are confident that the Kidman business will be in good hands,” Kidman chairman John Crosby said.
Bid ‘unambiguously good news’: Xenophon
Independent Senator Nick Xenophon has come out in support of the Hancock bid, after criticising previous offers from foreign buyers.
“On the face of it, this seems like unambiguously good news, it gets the balance right, at least much better than it would’ve been if it was majority foreign owned,” he said.
“This is not only Australia’s biggest cattle property, it’s Australia’s biggest landholding, and it’s an iconic asset.
“For it to have gone to foreign hands would’ve sent a signal to the rest of the world, that we don’t really value iconic assets such as this.”
But he said the latest bid did not override the need for changes to Australia’s foreign investment laws.
“This doesn’t obviate the need for there to be greater transparency, greater scrutiny of foreign investment deals because right now the current rules are as clear as mud,” he said.
S Kidman and Co Ltd went on sale a year and a half ago.
It is one of Australia’s largest beef producers, with an average herd of 185,000 cattle.
The company has pastoral leases covering 101,000 square kilometres across South Australia, Western Australia, Northern Territory, and Queensland.