All-Aussie bid for S. Kidman & Co likely; may create hurdles for Rinehart-Shanghai Cred offer
THE S. Kidman and Co cattle empire could become the subject of a bidding war if a competing proposal by an all-Australian bidding consortium eventuates.
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THE S. Kidman and Co cattle empire could become the subject of a bidding war if a competing proposal by an all-Australian bidding consortium eventuates.
Mining magnate merchant Gina Rinehart earlier this month lodged a $365 million bid for the Adelaide-headquartered cattle empire, in collaboration with former bidder Shanghai Cred.
But yesterday pastoralist Stirling Buntine, representing a competing bidding consortium, made up of four wealthy families — the SA-based Brinkworths, and the Buntines, Harrises and Oldfields — went to Canberra to make the case for their bid, which is yet to be lodged.
While the so-called BBHO bid does not have a firm number attached to it, a figure of $385 million has been reported.
While the Kidman shareholders’ advisers have an agreement to deal with the Rinehart consortium, competing bids can still be tendered.
If Kidman was to back out of the Rinehart deal, it would trigger a $3.8 million “break fee” payment to the Rinehart consortium. If a higher bid is lodged, the Rinehart consortium has the right to match it.
The Rinehart consortium has said it would keep the Kidman properties intact, and maintain the Adelaide head office, while the BBHO group would break up the properties between them.
The BBHO group also said yesterday it would maintain the Adelaide head office and potentially grow its size, but also said it could not guarantee everyone there would keep their jobs.
Mr Buntine faced the media in Canberra yesterday to say they were in negotiations to lodge a counteroffer, which he said was “not too far different” in cost to that put in by the Rinehart consortium.
“We are fair dinkum about this,” he said.
“It is our intention to take this great Australian company and legacy and grow it into a global brand all Australians would be proud of.
“We intend to fight for these places … we don’t expect anyone to back us. We’re big boys and we back ourselves.”
Under this plan the property would be split between the four families, who between them have about 400,000 head of cattle to add to the 150,000 already there.
Kidman would “morph” from a cattle station to a marketing and distribution business, with profits kept in Australia, Mr Buntine said.
He added that the existing Adelaide office would remain and could double or even quadruple in size.
His intention was to ensure shareholders as well as the Kidman board and the Government knew there was an alternative. While the Rinehart bid will have to be approved by the Foreign Investment Review Board, the BBHO bid will not.
South Australian Senator Nick Xenophon declared it a “credible, local bid to keep S Kidman & Co in 100 per cent Australian hands”, and called for a “level playing field”.
“It’s clearly in the national interest,” he said.
A previous bid lodged by Dakang Australia Holdings — a consortium including Shanghai Cred with majority overall Chinese ownership, had offered $371 million for the Kidman empire but had twice been rejected by the Federal Government.
The Government had excised Anna Creek Station from the deal because of its proximity to the Woomera weapons-testing range; BBHO are bidding for the whole business, including Anna Creek.
Nick Xenophon Team MP Rebekha Sharkie asked Treasurer Scott Morrison to respond to the deal.
“(Kidman & Co) are in charge of the process for which bids they will accept or not,” he said.
“They will obviously be subject to the legislation governing foreign investment in Australia.
“So I am pleased about the fact that having rejected the foreign ownership proposal for Kidman … now there are other bids coming forward.”
The property covers more than 100,000 square kilometres across four states.
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