Just when it seemed the big money battle for the S. Kidman & Co pastoral empire was finally won with a Chinese-led deal, local investment hopeful DomaCom insists it is still in the game.
Its unconventional crowdfunding-styled campaign has been raising funds from Australian “mum and dad” shareholders and is confident about soon outbidding the $370.7 million offer from China’s Dakang Australia.
Darkang’s bid is assisted by 20 per cent partner Australian Rural Capital (ARC), a listed agricultural investment group run by former merchant banker turned agribusiness director James Jackson.
He is offering Australian investors the chance to be part of the 750,000-hectare Kidman deal via shares in his Australian Securities Exchange (ASX) listed investment trust.
But DomaCom chief executive Arthur Naoumidis dismissed ARC as a $5m shell company providing local “window dressing” for the Chinese bid, which is largely backed by mining, real estate and ag conglomerate Shanghai Pengxing that has a chequered background in farming.
Mr Naoumidis said his property fund group was rustling up genuine Australian investor and institutional backing which Kidman directors could not ignore.
While Foreign Investment Review Board approval for the Dakan-ARC deal is on ice until late July as Treasurer Scott Morrison awaits a review of the sale’s national interest implications, DomaCom is preparing its counter-offer.
“We’ll be on some time in the next month – we only have to beat $370.8m to force the Kidman board to review its options,” Mr Naoumidis said. He added some existing Kidman family shareholders wanted a local investment push succeed – and to cover the company’s full 10.1m ha 10-property portfolio – so they could contribute and retain a stake in the business.
Since December DomaCom has used internet crowdfunding strategies to highlight the Kidman sale to potential small investors, including the self-funded superannuation market.
It has $70m in pledges from about 5000 investors and expects institutional investment backing to support its plan for the 117-year-old pastoral business.
DomaCom’s strategy would split the land assets from the business so an ASX-listed Kidman and Co operated without tying up shareholder capital in land ownership. The Kidman properties would be owned by DomaCom investors (with their investment backed by the Perpetual Trustee group) and leased back to the listed beef business to earn about $8m annually in rent.
Mr Naoumidis’ property fund was also raising about $20m to support similar farmland investments in South West NSW and North Queensland, to be leased back to their current owners.
If its big $370 million-plus pastoral country sale goes ahead, S. Kidman & Co will have pulled off a “pretty remarkable achievement”, says veteran rural property agent Bruce Gunning.
“All the knowledgable people seem to consider it an excellent price for that part of the country,” said the Ray White Rural’s Sydney-based principal.
The Darkan Australia-led syndicate is offering to paying at least $20m more than its parent company bid six months ago, but the current deal excludes the 23,700 square kilometre Anna Creek Station which represents about 25pc of the current Kidman estate.
“Well done to the Kidman management – they’ve scored a try under the goal posts and kicked a conversion,” Mr Gunning said, noting the flow-on impact on remote land and enterprise values could be significant.
