Rival all-Australian bid for Kidman cattle empire tipped at $385m

An all-Australian play for the Kidman cattle empire, backed by wealthy ranchers, is expected to be formalised this weekend.

Senator Nick Xenophon held a press conference today with Sterling Buntine and Bob Katter MP.

Nationalist lawmakers have teamed up with local ranchers to try to counter a bid involving Chinese buyers for the S. Kidman & Co cattle empire, in what would be one of Australia’s biggest agribusiness deals.

Independent and small-party lawmakers courted by Prime Minister Malcolm Turnbull to backstop his one-seat majority, threw their influence on Thursday behind a potential “all-Australian” offer for the Kidman ranches, which cover an area larger than Ireland.

The bid by the BBHO syndicate, yet to be formalised, is expected to value the ranches at $385 million ($US295m) and would pit some of Australia’s wealthiest ranchers against mining billionaire Gina Rinehart and China-based partners Shanghai CRED Real Estate Stock Co. They have offered $365 million for Kidman.

The cattle empire includes the world’s largest cattle ranch, Anna Creek Station, located beside a strategic missile range.

Surging Chinese investment in housing and trophy agriculture assets is triggering a backlash in major economies from Europe to the US, as well as Australia. The government has repeatedly stated the country’s openness to foreign, and specifically Chinese, investment, but Mr Turnbull has faced pressure from within his conservative coalition and from fringe lawmakers to oppose any foreign farm takeovers.

The government last year blocked an offer from China’s Shanghai Pengxin Group Co to buy Kidman outright, arguing that the deal covered too much land and overlapped the Woomera missile test range. And in May, Treasurer Scott Morrison, who has veto power over deals, ruled that an offer from China-based Dakang Australia Holdings and Australian Rural Capital was against the national interest.

In August, Canberra blocked two rival bidders, from Hong Kong and mainland China, from taking a controlling stake in Ausgrid, the country’s largest electricity network. The state government of New South Wales said on Thursday that it had agreed to lease the Ausgrid network to two Australian pension funds for $16 billion.

“Despite my name I’m not xenophobic,” said Senator Nick Xenophon, whose NXT Party controls a crucial Parliament voting bloc. “But in this case we must consider a credible, local alternative bid that is commercially competitive with the one that’s been put up by Gina Rinehart and her Chinese partners.”

The Kidman empire, founded in 1899, has leases covering 40,000 square miles, more than 1 per cent of the continent, across South Australia, Western Australia, Northern Territory and Queensland. The family-owned empire is one Australia’s biggest beef producers, with an average herd size of 185,000 cattle and exports to the US, Japan and Southeast Asia. The holding went on sale almost 18 months ago.

Independent lawmaker Bob Katter, a political maverick and vocal critic of foreign farm investment, opposes the bid involving Shanghai CRED, despite the fact that Ms Rinehart would have two-thirds control.

“Australians should own their land,” Mr Katter said, standing alongside BBHO syndicate leader and Northern Territory rancher Sterling Buntine. The rival Rinehart bid “involves no development for Australia except baubles and tomahawks and blankets,” he said. “That’s what’s on offer to us.”

Mr Buntine said BBHO syndicate members were holding talks with bankers on Friday and expected to launch a counteroffer by the weekend, dependent on successful negotiations. Other members of the group include South Australian cattle king Tom Brinkworth, who in 2013 claimed the record for the world’s largest cattle drive.

“We are fair dinkum about this,” he said. “We intend to fight for these places. It is our intention to take this great Australian company and legacy and grow it into a global brand.”

Ms Rinehart’s Hancock Prospecting said this month that a deal with Kidman had been reached that would see her company control 67 per cent of the cattle-ranch empire and Shanghai CRED the remaining 33 per cent. Shanghai CRED was part of the Dakang consortium that earlier failed in its bid to buy Kidman.

Dow Jones