An all-Australian consortium bidding $386m for the S Kidman and Co cattle empire has confirmed it would divide most of the Kidman land between the four families involved in the deal.
Sterling Buntine, Tom Brinkworth, Malcolm Harris and Viv Oldfield have put together the $386m bid under the BBHO consortium.
It is seeking to outgun a $365m bid by the Gina Rinehart-led joint venture company Australian Outback Beef (AOB), in which Hancock would own 67% of S Kidman and Co, with the Chinese-owned Shanghai Cred to hold the other third.
Buntine said if BBHO’s bid for the company were successful, the S Kidman brand would continue, with its herd of 150,000 cattle jumping to more than 550,000, but some of the land would be split.
“Some of the properties will be kept in this S Kidman and company, [with] those properties that are most strategic to go into the marketing and distribution business,” Buntine told the ABC.
“But the other properties which will be 80-90% of those properties will drop back into the individual syndicate families’ individual companies.”
The Kidman company had previously indicated its preference was for the properties to stay in one parcel.
Buntine said he did not consider the breakup of land between the four families to be a problem, given that they were Australian grazing families.
The $386m BBHO offer also includes the Anna Creek station, which has an area up to 26,000 hectares adjacent to the Woomera weapons testing range.
AOB’s $365m bid does not include Anna Creek, which means the two bids are of similar value.
The offer by Rinehart-AOB secured it “preferred bidder” status. It would require Foreign Investment Review Board approval, but it would represent a 1% lower foreign ownership than is now the case.
In April the treasurer, Scott Morrison, blocked the sale of S Kidman & Co to a majority Chinese-owned consortium because it could have been contrary to the “national interest”.
Kidman’s assets comprise 101,411 sq km – 2.5% of Australia’s agricultural land or 1.3% of its land mass, stretching across Western Australia, South Australia, Queensland and the Northern Territory.
Last week, when news of the BBHO bid broke, Hancock Prospecting’s chief executive, Garry Korte, said the 18-month sales process had been extensive and exhausting.
“It is a pity that one party chose not to meet those minimum requirements and is now seeking political favours to change the rules after the siren has sounded,” Korte said.
But Buntine, who held a press conference in parliament last week, said BBHO was not asking for “political favours”.
“We hope that there is more money on the table and there is a lower execution risk, we hope that will give us the win on this,” Buntine said.
A spokesman for S Kidman and Co confirmed the BBHO bid had been received but would not discuss the details of any bids.
“As we have already indicated, Kidman’s status as a public unlisted company with more than 50 shareholders means that under-bidders or parties not directly participating in the sale process still have an opportunity to submit a takeover offer,” the spokeswoman said.
“At any time throughout the process until the takeover offer closes, parties can submit a superior counter-proposal for acquisition of the company.”
The spokeswoman said if a superior counter-proposal were received, it would be assessed by the Kidman board. Under its agreement with Kidman, AOB has the right to match the bid.
“If it is judged to be a superior proposal, and AOB do not exercise their matching right under the bid implementation agreement, directors have a duty to put that superior proposal to shareholders,” the spokeswoman said.
S Kidman and Co, founded in 1899 by Sir Sidney Kidman, remains Australia’s largest private landholder. The company operates 10 cattle stations, a bull breeding stud farm and a feedlot.
Given that 98% of the land is held under pastoral lease, the bid would require state government approval for the transfer of leases to the new owners.
BBHO has submitted its bid for 100% of the Kidman shares and is conditional on acquiring at least 90% of shares.
Nick Xenophon said there was a fundamental flaw in the Foreign Investment Review Board laws, which were blind to any local bids which might be on “equivalent terms”.
Xenophon said the BBHO bid was unconditional and in excess of the ABO bid “so you would think it was in the box seat”.
He added: “The concern here is that the Foreign Investment Review Board could wave the Rinehart-Shanghai bid through despite that there is a credible alternative bid that is 100% Australian.
“That is a flaw in our current Foreign Investment Review framework and it needs to be reformed.
“We need to fix the flaws, the loopholes in our current foreign investment framework which basically means there isn’t a level playing field if you are 100% Australian consortium that is putting up a credible alternative bid.”
Xenophon said he hoped the Kidman sale was not a “done deal”. “It is important that any bid led by Gina Rinehart is treated equally compared to the 100% Australian bid.
“I have nothing against Gina Rinehart, I have never met the woman, but I just want it to be absolutely transparent that any process ensures that a local bid gets the same fair treatment as any bid that involves overseas interests.”
