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Australian grazing families confirm $386 million offer for Kidman

by Beef Central, 23 October 2016
sterling-buntine-media-conference

BBHO spokesperson Sterling Buntine addresses media about the syndicate’s offer to buy S. Kidman & Co at Parliament House in Canberra.

 

A consortium comprising four Australian grazing families represented by Tom Brinkworth, Sterling Buntine, Malcolm Harris and Viv Oldfield on Sunday announced it will submit a $386 million offer to acquire 100pc of the shares of S. Kidman and Co.

It now seems likely S. Kidman & Co shareholders will have two significant bids to consider, as this offer follows the $365 million bid by announced by Gina Rinehart’s Hancock Prospecting Pty ltd and Chinese partner Shanghai CRED for the 101,000 square kilometre operation earlier this month.

Details of the ‘BBHO’ bid:

The four-family consortium has become known as ‘BBHO”, an acronym formed from the bidders’ surnames.

“We have developed a compelling and superior proposal to that recently supported by the Kidman Board which will see Kidman 100% Australian owned,” consortium spokesman Sterling Buntine said.

“BBHO’s financing is committed and our proposal does not require Foreign Investment Review Board approval which means greater certainty for the Kidman shareholders.”

“The Kidman story and legacy of Sir Sidney Kidman is in the DNA of our cattle industry. Sir Sidney was a pioneering nation-builder who’s values and vision helped build Australia into a respected leader in the global beef industry.”

“The four families comprising the consortium are deeply committed to honouring and preserving the Kidman heritage and brand which will continue under the stewardship of highly regarded and successful Australian graziers,” Mr Buntine said.

He said the BBHO families have direct, active, inter-generational involvement within the industry, and continue to this day to passionately work within their respective agricultural operations.

Interests of the group span livestock, grain, transport and other industry services.

“As Australian grazing families we share a strong affinity with the Kidman properties.

“My father carted cattle for Kidman for many years, while several members of the Oldfield family earned their stripes as drovers on Sir Sidney’s properties.

“More recently the Brinkworth family’s epic 18,000 head cattle drive from central west Queensland to southern New South Wales followed in Sir Sidney’s similar footsteps from earlier this century.”

Together the BBHO families intend to maintain and expand a Kidman branded cattle marketing and export operation representing the families combined herd in excess of 500,000 head.

“This initiative would more than treble the size of the herd currently marketed under the Kidman name,” Mr Buntine said.

An Adelaide office will be maintained and the Tungali feedlot will be retained and BBHO said it looked forward to working with Kidman management and employees as it implements growth and development opportunities for the business.

“As Australian graziers we feel very privileged to be able to present this offer to the Board and shareholders of Kidman.

“We look forward to the opportunity to progress discussions with the Kidman board in respect of our Offer,” Mr Buntine said.

The Consortium has retained Agrify and Hindmarsh Partners as financial advisors on the transaction.

Conditions

The offer will be subject to a number of conditions, which are set out in Annexure A.

These include a condition that BBHO acquires a relevant interest at least 90% of all Kidman shares on issue.

The offer is not subject to approval by the:
• Foreign Investment Review Board; or
• Peoples Republic of China’s respective regulators including the National Development and Reform Commission, the Ministry of Commerce or the State Administration of Foreign Exchange.

Full particulars of the offer will be outlined in the Bidder’s Statement, which will be despatched to Kidman and sent to Kidman shareholders in due course, the group said.

Where to from here?

A spokesperson for the BBHO bid told Beef Central that the syndicate is preparing a bidders’ statement to put to theAustralian Securities Investment Commission, for consideration by the S. Kidman & Co board and its shareholders “in coming days”.

Ms Rinehart lodged a $365 million Australian-majority bid for 67 per cent of S. Kidman and Co, with Chinese-owned Shanghai CRED to hold the other third.

That offer has been publicly welcomed by the S. Kidman & Co board, and involves a $3.8 million break-fee if either party walks away from that deal.

However it still also requires Foreign Investment Review Board (FIRB) approval.

The BBHO deal would see the land currently held by S. Kidman and Co divided up between the four families, but the shareholders, which would have a combined herd of about 600,000 cattle in total should their Kidman bid succeed, would sell beef under the famous SK brand.

The Hancock-Shanghai CRED deal would be see most of the existing S Kidman and Co stations remain largely intact.

Its purchase will exclude the 24,000 square kilometre Anna Creek station which is close to the Woomera weapons testing range. This is seen as a way of improving the bid’s chances of gaining FIRB approval .

A spokeswoman for Ms Rinehart’s company Hancock Prospecting told AAP another local buyer had been lined up for Anna Creek and when that sale is accounted for, the real difference in value between the Hancock-Shanghai CRED and BBHO bids will be only about $1 million-$2 million.

The AAP said the spokeswoman also argued the BBHO consortium was no guarantee of getting state government approvals, needed to get pastoral leases transferred, because of dubious ‘track records’.”That was a reference to Mr Brinkworth, who has previously been fined for illegal land clearing and charged with animal cruelty but found not guilty,” the news agency reported.

 



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