After months of quiet, behind the scenes negotiations, the battle to buy S. Kidman & Co is now very much out in the open as both parties vying to buy the iconic cattle company trade public blows over which has the better deal.

In confirming its $385 million bid on Sunday, the ‘BBHO’ syndicate of Tom Brinkworth, Sterling Buntine, Malcolm Harris and Viv Oldfield said its offer was superior in several ways.

Group spokesman Sterling Buntine said the group’s financing was committed, its proposal does not require Foreign Investment Review Board approval which means greater certainty for the Kidman shareholders, the four families were deeply committed to honouring and preserving the Kidman heritage and brand, and their offer trebled the size of the herd currently marketed under the Kidman name. At $385 million, it was also a higher bid.

In response the Hancock Group-Shanghai CRED joint venture bid has released a statement this morning headlined: “Some reasons the Hancock Joint Venture bid is superior”.

The statement, signed by Hancock Group CEO Garry Korte, offered seven reasons why the group believes its bid is better:

• Kidman Don’t Want to Break Up the Business: The Kidman Shareholders, the Kidman Board and the Kidman management team made it clear to all bidders from the time we entered the process that they were not interested in bids that would see the Kidman business broken up. They want the iconic Kidman business that Sir Sidney Kidman established in 1899, and has been built up over more than 100 years, kept intact. They wanted the Kidman legacy and heritage respected – not just in words but in reality.
• Hancock long term commitment to the Kidman business and staff: The Hancock JV has been clear and consistent from the start and we provide a 100% commitment that:
  • We will not break up the Kidman properties or the Kidman business in any substantial way (a sale contract is already in place for Anna Creek which is only a small part being less than 8% of the overall carrying capacity).
  • We will encourage the Kidman heritage and legacy to be maintained, a heritage shared in part with James Nicholas, Mrs Rinehart’s grandfather, and long term friend and business partner of Sir Sidney Kidman.
  • We will not close down or radically change the Adelaide head office or make the hard working experienced Kidman staff, who in many cases have been with Kidman for decades, redundant.
  • We will observe high standards of pastoral care in line with Kidman’s existing standards and will not tolerate animal cruelty or illegal land clearing.
• Hancock is an Australian bid: The Hancock JV bid is an Australian bid – you don’t get much more Australian than fourth generation Australian Gina Rinehart, so let’s not start to pretend otherwise. Mrs Rinehart is from a long line of great Australian pastoralists, from her great grandfather down to herself. The real difference between the bids is that we will maintain and secure the future of the Kidman legacy, invest in the stations and avoid seeing it split up and destroyed.
• The Hancock JV reduces the level of foreign ownership: It is hard to understand criticism of the Hancock JV bid structure, when if we are successful the level of foreign ownership will actually drop from the current level of 34% which is held by foreign shareholders to 33% under the Hancock JV. For all the politicking there haven’t been too many people deeply concerned over many years with the existing Kidman foreign shareholding.
• Hancock has the capital and market access to grow Kidman: There is a very real benefit with the Hancock structure in that it provides a concrete way to ensure that the Kidman business can continue to grow and develop, creating jobs in our rural communities. To grow Kidman requires capital and a workable plan. Hancock has the capital and the stated intention to grow the Kidman business, and we have a minority partner that will secure a growing additional market that will assist this. Australia already produces more cattle than we require, so to grow Kidman we need access to additional markets.
• The Land remains firmly in Australian control: No land is going anywhere, it stays right here in Australia under Australian control, but the Kidman business grows and Australians benefit as a result.
• Support for Hancock is a great choice for Kidman: If the Kidman Board and Shareholders chose to support Gina Rinehart’s bid they will be able to enjoy the knowledge that Sir Sidney Kidman’s legacy, the business and its hard working staff will be maintained into the future. A break up of the 100 year legacy started by Australia’s iconic Sir Sidney Kidman would be very sad and definitely not what he would have wanted after so much effort.

BBHO Response

In response to the Hancock Group’s statement, BBHO said it was “surprised and dismayed that any bidding party would try to speak on behalf of the Kidman shareholders, Board and Management or Sir Sidney himself to further their own agenda”.

“The BBHO consortium will present the Kidman Board and shareholders with a clear and simple choice: a higher bid, fewer conditions, no FIRB or approvals from the People’s Republic of China are required and an authentic respect and commitment to the preservation and growth of the cattle culture created by the Kidman family,” the syndicate said in a statement.

“It is very disappointing to see a potential owner of this iconic agricultural asset dealing in misinformation and smear.

“The leaders of this country’s rural community have always a played a hard game but a straight game.

“The BBHO partners can all be counted upon to do the right thing by this iconic asset: its employees, its herd, its land, its investors and the people of Australia.

“There is only one proposal under consideration (Hancock Prospecting and Shanghai CRED) that requires the carving off of the iconic Anna Creek station from the Kidman holdings to facilitate Government approval. BBHO’s proposal does not.

“There is only one proposal (BBHO’s) that will triple the size of the herd marketed and sold under the Kidman brand.”

Meanwhile Kidman managing director Greg Campbell said yesterday the company had to see the formal ­detailed bidders’ statement before it could form an opinion about the BBHO offer.

“All we have seen is the press release announcement, not a formal bidder’s statement that spells out the terms and conditions of their offer,” Mr Campbell told the Australian.

“(The board) has to form an opinion as to if (the bid) is superior or not, if it delivers value to shareholders and if the offer is likely to be met, before we decide whether to put it to shareholders; without a formal statement we can’t do any of that yet.”

Sources: BBHO, Hancock Group, The Australian