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Australian super fund launches $400m late bid for Kidman

by Beef Central, 14 October 2016
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* Editor’s note: since this item was first posted earlier today, it has been revealed that the super fund trustee behind the bid is ASX-listed Equity Trustees.  

 

AN Australian-owned superannuation fund backed by one of the largest trustee companies in Australia, has announced plans to bid for the S. Kidman cattle business.

S.Kidman & Co_Logo_Sm_RGBThe super-fund, which is expected to reveal its full identity as soon as this afternoon*, is understood to be mounting a late bid worth at least $400 million – well above existing known bids for the Kidman assets.

The superannuation fund plans to open the door, before the end of October, for many Australians to participate in the acquisition of S. Kidman & Co.

ASIC-licensed adviser with Melbourne based financial planning group Interprac, Steve Burgin, says the fund plans to buy the land component of the Kidman empire, and lease back to existing Australian cattle operators providing an income for investors.

The bid would be structured to enable Kidman family members who wish to retain their interests in the company to do so. There was considerable disagreement within Kidman familt ranks earlier obvert the decision to sell the asset.

The deal will apparently also include a mechanism to facilitate their exit from ownership in the future if they so desired.

Mr Bergin said he commenced negotiations with a number of super funds over Kidman several months ago.

“Australians have enthusiastically expressed a real keenness to participate in the acquisition of Kidman, but lacked the means of being able to until now. Over 50,000 clients have pre-registered to commit part of their super funds to direct agricultural interests,” he said.

“As a result of this interest, we have been working hard to develop an appropriate low cost, nil entry fee vehicle to allow all Australians with superannuation a chance to be part of these sorts of acquisitions. The big agricultural spreads have tended to be the domain of corporates, both domestic and foreign, but we think it’s about time Mums and Dads had a chance to own a slice of an outback icon too,” he said.

The structure of the investment vehicle was capable of adaptation to permit joint venture partners and other investment vehicles such as fractional property investment platform Domacom, which has been a strong supporter of creating opportunities for small investors, to participate in the Kidman bid, Mr Burgin said.

For many years, foreign super funds have successfully invested in prime Australian agricultural assets and recently Queensland Investment Corporation committed to acquire an 80pc interest in NAPCo cattle operations in northern Australia.

This proposed Australian super fund bid for Kidman comes hot on the heels of the Hancock Shanghai CRED joint bid, which will require FIRB approval, state and territory government approvals as well as various Chinese government consents.

“Since there is no foreign participant our bid, none of these impediments would apply,” Mr Burgin said.

“There’s no doubt the Kidman sale has opened many ordinary people’s eyes to the opportunity of being part of Australia’s pastoral industry via their superannuation funds, and we are keen to progress our plan to see that happen for as many of them as possible,” he said.

S. Kidman managing director Greg Campbell said new bids would still be considered as part of the sale process.

The process is still far from over, as rules around the sale of a public unlisted business with more than 50 shareholders mean that under-bidders or parties not directly participating in the sale process still have an opportunity to submit a takeover offer at any time throughout the process until the takeover offer closes,” he said.

 

 



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  • Lee Pattinson October 15, 2016

    Australia needs to keep these major properties owned by Australians .We cannot afford to keep selling our valuables assets to foreign ownership. The Government should be putting its foot down and saying “no”

  • Glenn William Holley October 15, 2016

    I am willing to place all my SUPER into this, Thank You.

  • Valmai Jones October 15, 2016

    I am pleased to see it will remain Australian owned, I have spent my whole life in the grazing Idustry

  • Lachlan Sutton October 17, 2016

    As much as it is great to see Australian excitement for the Kidman business and agricultural interests back in the business papers, one cannot help to think how much $400 million could help young farmers trying to get a start in our industry. As much as smaller amounts will fail to capture the attention of these large funds, imagine if one day a young farming family could avoid coming up with 30,40 or 50% equity to purchase their first property, let alone stocking it and instead enter easily into an equity or joint venture arrangement with someone to help get their start. Just imagine the good news stories we could have with an expansion of what is already a great catalyst of progressive young farming families back in rural communities.

  • Mark Cook October 20, 2016

    As the sale process gains momentum would be interested to understand the base assumptions supporting the valuations applied to these bids…..

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