Agribusiness

S.Kidman & Co looks for a buyer

Jon Condon, 10/04/2015

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THE shareholders of S. Kidman & Co Ltd have decided to offer the iconic Australian cattle business for sale, putting it to the market as a single going concern including stock, plant and property.

The surprise move announced this morning is a clear reflection of current optimistic outlook for Australian beef, with booming world demand for red meat protein, a lower Australian dollar, and growing demand for high quality extensive pastoral assets, both from within Australia and overseas.

A sale agreement, should it be achieved, will draw to a close a 116 year pastoral history extending back to the foundation of the company in 1899 by the legendary Sir Sidney Kidman, who took over the pastoral business he and his brother had established some years earlier.

About 98 percent of shares in the unlisted public company remain owned by Kidman descendants and their extended families

Kidman & Co is Australia’s largest private landholder with 11 cattle stations and a feedlot covering more than 100,000sq km across Western Australia, the Northern Territory, Queensland and South Australia. Many of the properties have been held by the company for more than 100 years.

With is recent decision not to renew its sub-lease on Nappa Merrie station in the Channel Country, and the impact of drought, S. Kidman ranks fourth in herd size in the Australian beef industry, behind Australian Agricultural Co, Consolidated Pastoral Co and Stanbroke. The herd is expected to reach around 160,000 branded cattle by June 30, down from a peak of 225,000 head four or five years ago.

Measured by cattle numbers, the move to sell the Kidman pastoral portfolio is easily the largest in the Australian cattle industry since AMP’s sale of Stanbroke Pastoral Co in October, 2003, and CPC’s sale to Terra Firma in 2009. Major shareholders in the North Australian Pastoral Co – similar in size today as Kidman – considered offering that business for sale in 2013, but later withdrew. The NAPCo business was never officially placed on the market.

The S. Kidman & Co company is headquartered in Adelaide and employs 170 staff. Its portfolio includes Anna Creek Station in South Australia, which at 23,000sq km is the largest cattle property in the world. Other holdings are Durham Downs, Durrie, Glengyle, Morney Plains, Naryilco and Rockybank (Qld), Innamincka, Macumba and Tungali (SA), Helen Springs (NT) and Ruby Plains (WA).

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Cattle on Kidman’s Channel Country holdings during a flood-out year

The business turns off an average 15,000 tonnes of carcase beef each year, supplying 1.3pc of Australia’s boxed beef exports.

Kidman & Co managing director Greg Campbell said the sale represented a decision by the Kidman family members, who have been long-term investors in the Australian cattle industry, to capitalise on the present demand for quality Australian agricultural assets.

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Greg Campbell

“Many of the family have other existing investments in Australian agriculture and elsewhere and the sale will allow them to convert long-term capital gains into cash to support their other businesses and investments,” Mr Campbell said.

“The company is in excellent financial shape, being debt-free with no mortgages over any assets.”

“Our business strategy, which was largely set in the early days of the company, has stood the test of time,” Mr Campbell said.

The majority of company cattle are bred in northern and Central Australia and finished on the naturally-irrigated floodplains of the three big Channel Country rivers in Queensland.

The geographic spread in the property portfolio also covers northern Australia, which allows ready access to live export markets.

Founder, Sidney Kidman

Founder, Sidney Kidman

“The quality of Kidman cattle (today based on composite breeding with some Santa Gertrudis influence) is highly regarded, and the company brand is well-known within saleyards and the feedlot sector, both within Australia and south-east Asia,” Mr Campbell said.

Across the portfolio the properties have received fair to excellent summer rainfall and the herd of 155,000 branded cattle is presently 14pc below long-term average carrying levels, after several tough years. (See Beef Central’s earlier reports on Kidman’s end of financial year performance for 2014 “Dry year impacts on Kidman & Co financials”, and 2013 “Rare loss for S.Kidman as drought impact bites” ).

A further 30,000 calves will be branded before June 30.

The sale of the Kidman business will be managed through a tender process by Ernst & Young in Adelaide.

The company says an Information Memorandum will be issued in May which will further detail the sale process.

“The sale of S. Kidman & Co represents an unprecedented opportunity for an investor to acquire a well-balanced, large scale, professionally managed portfolio of genuine blue ribbon Australian cattle properties, and a small slice of Australian history,” a company statement said.

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Comments

  1. John Gray, 25/04/2015

    This is as stupid as when AMP sold out Stanbroke Pastoral,
    A fair chance this will be another great Australian icon to be bought out by foreign ownership.
    A bunch of shareholders that cannot see past the end of their noses,
    with no pride in the work done by and the empire built by the late sir Sydney, they are just greedy for money. Shame on them all.

  2. ANDREW ANDERSON, 11/04/2015

    THIS IS AN OPPORTUNITY FOR LEADERSHIP IN AUSTRALIAN FINANCAL INSTITUTIONS, PARTICULARY THE LARGE SUPER FUNDS, TO PUT THEIR MONEY IN AUSTRALIAN ASSETS, IN THE COUNTRY WHERE THERE MONEY HAS COME FROM, RATHER THAN THE RETAIL MALLS OF OVERSEAS COUNTRIES ETC, WHICH GENERATES EMPLOYMENT AND WEALTH FOR FOREIGN COUNTRIES NOT IN OUR OWN COUNTRY. AMP DEPARTURE FROM STRADBROKE PASTORAL WAS A DARK DAY FOR AUSTRALIA.

  3. Brian, 10/04/2015

    There wouldn’t be too many Australian cattle companies that would have the money to purchase Kidman on a whole. They would need to split it off, a shame. So it looks like another large scale Ag company in overseas hands.

  4. wayne comedies, 10/04/2015

    Love sid all my life. Reading his book 4 3rd time. Would love Morney Plains. There were the best paddock horses I’ve seen the other month. Wishing all .all the best. BC.

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