Advertising industry high flyer Harold Mitchell plans to sell up to 49 percent of his large northern WA cattle grazing business to boost the business’s growth prospects, financial media reported this morning.
The Australian Financial Review says expectations are that the sale could fetch about $40 million.
Mr Mitchell bought into the cattle station business Yougawalla Pastoral Co in 2008 along with former Seven West Media director Doug Flynn and the Sale family. The company survived the 2011 live export ban, purchased further land holdings during the trough and has grown from 1000 head of cattle to its current 45,000 head in size.
Mr Mitchell confirmed to the AFR that a stake in the business, which owns 850,000 hectares and leases another 560,000ha in Western Australia’s East Kimberley, would now be offered for sale.
Yougawalla was involved in this land lease deal with indigenous owners, reported on Beef Central last week.
“We haven’t really encouraged anything here but we have to at least respond to the interest,” Mr Mitchell said.
“The timing is right though, because we are looking to take the business from 45,000 head to 85,000 head and that is probably a little too hard to do all by myself.”
Mr Mitchell and partners have appointed KPMG and ANZ to handle the process. The bank and professional services firm told the AFR they have been fielding ‘strong interest’ from offshore for beef production and farmland driven by a depreciating Australian dollar, strong beef prices and growing demand from China.
Mr Mitchell admitted he has been very lucky picking the cycle.
“All luck. I have been as lucky in this as I was in the advertising business,” he said.
His decision to sell part of the business, while maintaining a majority share and management, also comes just as the Terra Firma-backed Consolidated Pastoral Co is said to be being advised by Barclays on possible capital partners or partial sale of its business.
In the last 12 months there has been renewed interest in Top End cattle stations.
Singapore-based Pardoo Beef Corporation, run by Bruce Cheung, purchased the 198,000ha Pardoo Station for $13.5 million earlier this month while other major operators such as Great Giant Livestock Co, the second-largest cattle lotfeeders in Indonesia, and Japfa, also known as Santori, spent a combined $50 million buying cattle stations in the far north.
Billionaires Gina Rinehart and Andrew Twiggy Forrest also expanded interests in the northern cattle market last year.
Source: Australian Financial Review.