Gina Rinehart wants to buy Australian cattle station giant S Kidman & Co., in a $365 million deal which would see the vast private landholding remaining majority-owned by a domestic company with a smaller stake held by a Chinese partner.
Rinehart’s proposed deal involves a company called Australian Outback Beef Pty Ltd (AOB), which is 67% owned by Hancock Prospecting, Rinehart’s family company.
The other 33% of AOB is owned by Chinese real estate enterprise Shanghai CRED, run by Chinese property billionaire Gui Guojie. Shanghai CRED was previously part of the Dakang consortium whose bid for Kidman was rejected by the federal government. It withdrew from Dakang in August in apparent frustration at the failure to win regulatory clearance.
S. Kidman & Co Ltd has around 185,000 cattle on land covering covering 101,000 square kilometres across South Australia, Western Australia, Queensland and the Northern Territory. The future of the property has been something of a lightning rod for debate on the increasing ownership of Australian assets by companies from China.
The federal government previously rejected offers from Dakang and its ASX-listed bidding partner, Australian Rural Capital, on national interest grounds.
Gina Rinehart said in a statement: “Kidman is an iconic cattle business established more than a century ago by Sir Sidney Kidman. 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 $365 million deal is slightly lower than the $371 million offered by the Dakang consortium, although it involves the sale of some Kidman assets that were a sticking point for national security reasons.
S Kidman & Co has signed a bid implementation agreement with AOB on the deal, which is subject to Australian and Chinese government approvals. Conditions include no better offer being received by Kidman which its board agrees to, and the sale of Anna Creek station and the Peake by Kidman to other Australian grazing interests.
These assets were among the concerns from the federal government as they overlap the Woomera weapons testing range.
Hancock CEO Garry Korte said: “The quality of the Kidman herd and channel country properties complement Hancock’s existing northern cattle properties, and align well with Mrs Rinehart’s plans to build a diversified cattle holding in Australia, taking advantage of integration opportunities.”
In the statement from Hancock, Guojie said partnering with Hancock proved to productive approach and that he looked forward to having the opportunity to work with Hancock through the Kidman investment.
Ernst & Young has been managing the sale for more than 18 months, and has held talks with more than 600 interested parties in that time.