Kidman cattle empire ‘deal’ off election agenda

Scott Morrison has avoided ­making an election issue of the $371m provisional sale of the Kidman cattle empire to two Chinese companies.

Austalia’s biggest meat producers, S Kidman & Co Ltd, loading cattle at the Helen Springs Station, one of the company’s 13 farms

Scott Morrison has avoided ­making an election issue of the $371 million provisional sale of the vast Kidman cattle empire to two Chinese companies and a small Australian firm by giving himself an extension on the deadline for approval.

The “bid implementation” documents between the family-owned S. Kidman and Co and the Chinese purchasers, released yesterday, reveal the Treasurer has signed a government interim order extending the time he has to consider the Chinese consortium’s proposed acquisition of the Kidman empire from 30 days to 90 days, starting next week. Pushing the decision to late July removes the foreign sale of the historic and large agricultural asset to Chinese buyers from becoming an election issue.

Many members of the government’s junior partner, the Nationals — and their voters — are implacably opposed to the sale of such a significant rural asset and large farmland parcel more than twice the size of Belgium, to Chinese owners.

The sale includes nine of S. Kidman and Co’s sprawling outback stations in the Northern Territory, Queensland and South Australia, covering a total of 74,000sq km and including 180,000 cattle. It excludes the world’s biggest farm, Anna Creek station, containing the high-security Woomera rocket range within its 24,000sq km boundaries, which was the cause of a government veto in November of an earlier Chinese sale.

The original bid by an unnamed Chinese bidder — also believed to be from new part-owner Shanghai Pengxin — to buy the entire 101,000sq km, 10-station Kidman empire outright in Nov­ember, was knocked back by Mr Morrison because the deal was too large in area and too strategically sensitive.

The new deal gives China’s Shanghai Pengxin an effective 41 per cent controlling stake in the giant new Kidman cattle ­corporation, Shanghai CRED Real Estate a 39 per cent share, and agricultural investment firm Australian Rural Capital a 20 per cent listed slice.

The 80 per cent Chinese purchase, through a vehicle called Dakang Australia, still has to be approved by Mr Morrison under Foreign Investment Review Board guidelines. It is believed the ­S. Kidman and Co board understands the purchase deal and structure as outlined yesterday, with Anna Creek station divested, are no longer judged by FIRB as counter to the national interest.

A spokesman for the Treasurer said last night the government would not be making a “hasty decision” on the Kidman sale approval.

“The government will not make a decision until we are entirely satisfied with the national interest issues that relate to this transaction,” the spokesman said.

“We will continue to follow the established statutory processes to ensure the protection of the ­national interest.”

There also remains a month-long window after the bid has been lodged with the Australian Securities & Investments Commission for an Australian bidder to trump the Chinese consortium’s offer. However, at this 11th hour, and with few serious bidders having conducted due diligence of the cattle estate’s financial records other than the Lindsay Fox group, this outcome appears unlikely.

S. Kidman and Co chairman John Crosby said Dakang Australia and his company, owned by 58 Kidman extended family members and trusts through shares, had complied with all requests made by the FIRB.

“We believe the sale will sec­ure the long-term future of the Kidman enterprise (and) believe Dakang Australia and ARC will be good custodians of the business,” Mr Crosby said.

Australian Rural Capital is listed at just $5.5m on the Australian Securities Exchange.

It will now have to raise $74m to fund its 20 per cent purchase of the historic cattle company, which is Australia’s fifth biggest producer. The new owners are keen to see “mum and dad” Australians take advantage of the ­investment offer.

Dakang Australia director Gary Romano said the new owners were supportive of the current strategy and direction of Kidman and intended the business to be continued in its present form.

The board of S. Kidman and Co yesterday recommended to all shareholders in the family business that they accept Dakang’s offer of $31.38 for each of their shares, valuing the company — without Anna Creek station — at $371m. The Kidman family’s net business worth is estimated by BRW at $364m.