A SYNDICATE involving South Australia’s Jumbuck Pastoral Co and three city-based ‘silent partner’ investors has secured the prized Northern Territory pastoral asset, Wave Hill and Cattle Creek Stations in a deal worth $104 million, including cattle.
The price is among the highest ever paid for a single cattle property in Australia.
Run as a single entity, Wave Hill and Cattle Creek span 1.25 million hectares across the NT’s Victoria River District. The properties had consistently run 57,000 Brahman and Brahman cross cattle over the preceding ten years, but were offered last September with 40,000 head due to very dry conditions throughout 2020.
Jumbuck Pastoral Co joint managing director Callum MacLachlan confirmed to Beef Central this afternoon that the deal, including about 40,000 cattle, came to $104 million.
Given the sheer scale of the acquisition, Jumbuck Pastoral Co has thought creatively to put together a competitive bid, introducing the three Australian private minor shareholding city-based investors making their first investments into beef, in order to finance the deal. The business will operate under the new entity of Wave Hill Holdings Pty Ltd, involving Jumbuck partners Callum and Jock MacLachlan, parent company Commonwealth Hill Pty Ltd and the three introduced investors.
The Wave Hill deal is Jumbuck’s second NT investment, having purchased 540,000ha Killarney Station for $35 million in 2014. Two two properties will be operated independently.
Cattle turnoff from Wave Hill and Cattle Creek will go either south as grower cattle onto other holdings or for sale, or into the live export market out of Darwin.
“Wave Hill is a fabulous asset running cattle with great economy of scale,” Mr MacLachlan told Beef Central.
“It’s only the third time it has come onto the market in more than 100 years, and we saw this as an opportunity which comes along only very, very rarely,” he said.
Wave Hill is situated on the VRD’s high open downs with basalt plains and covered in Mitchell grass, in good seasons. Water infrastructure is extensive with 76 bores providing access for cattle grazing across the properties.
While a range of herd bulls have been used by vendors Western Grazing in recent years including Charolais, Charbray and Senagas, Jumbuck plans to revert the Wave Hill herd to its Grey Brahman origins.
Existing Wave Hill manager Gavin Miller and his wife Narelle have agreed to stay on under the new ownership.
After a very poor 2020 season following a failed 2019-20 wet, Wave Hill received some terrific rain in December, and good follow-up during January. Given how tough last year was, season wise the new owners plan to lightly stock the paddocks this year, with around 35,000 head to maximise pasture recovery.
“One of the features that attracted us during inspection in October was that the cattle were still in reasonable nick, despite the terrible seasonal conditions,” Mr MacLachlan said.
He said there was potential for further productivity improvement with investment in fencing and waters. “We think we will get the long term carrying capacity back to somewhere between 55,000 and 60,000 head, subject to significant expenditure over the next ten years,” he said.
Wave Hill had had only three previous owners over 140 years before its purchase this week by the Jumbuck consortium. Western Grazing’s Brian Oxenford bought the assets, including the trading name Western Grazing from Vesteys at auction back in 1992. Vesteys held the properties for more than 70 years, prior to that, having bought them from original owner, Nat Buchanan.
Noting the somewhat unusual financing arrangements behind the Wave Hill deal, Mr MacLachlan said he thought the introduction of outside minor investors who shared a pastoral operator’s vision, in order to secure very large assets like Wave Hill, might become more common.
“I can’t see why not,” he said.
He told Beef Central that Jumbuck itself had initiated the discussions with the three external investors in the deal.
“Importantly, we found people who we believe will be a good cultural fit for the business,” he said. “They share our vision for what’s going to be a long-term time horizon in an investment like this.”
Adelaide-based Jumbuck Pastoral Co operates a string of 11 cattle and sheep properties across four states and territories. Included are Killarney in Northern Territory; Blina and Meda in the Kimberley; Bulgunnia, Mulgathing, Mobella, Commonwealth Hill, McCoy’s Well and Mt Victor in SA’s southeast; Rawlinna in WA’s southeast and Gunbar in Central NSW. Sheep are on large stations in the three states, and cattle in the West Kimberley of WA and the Victoria River District of the Northern Territory.
The properties were put to the market last September under an expressions of interest campaign managed by Bentleys Brisbane.
The process started with non-binding offers, followed by inspections and final bids in mid-December. Beef Central understands as many as eight formal offers may have been lodged. Bentley’s Ben Cameron is on holidays, and was not available for comment for this item.
Commenting earlier, Mr Cameron said due to Wave Hill’s size, an investment overview document had been sent to around 40 prospective domestic and international parties who have made previous inquiries about other large-scale assets.
“A transaction of this size is highly likely to attract overseas capital, but we are not excluding anyone. It will be difficult for the foreigners to buy in a COVID environment due to the travel restrictions, so we are focussing on those who are in Australia and active. Given the inquiry to date, it is likely to sell to a domestic purchaser,” he said back in September.
Settlement is likely to take place in coming days, subject to NT Government minister’s approval over exceeding the NT’s nominal maximum landholding provision, but there are plenty of precedents for such approval to be granted.
Wave Hill’s rich History
Wave Hill was established in 1883 by renowned explorer and bushman Nat Buchanan and named Wave Hill by station manager Sam Croker after the sharp undulations of the plateau.
In 1914, the property was sold to the English company Union Cold Storage Co, part of the Vestey Group, a British pastoral conglomerate owned by Lord Vestey. The property was a cornerstone of the Vestey pastoral operations in Australia for the next 75 years, before the Vestey properties were dispersed in 1992.
Wave Hill is most widely known for the Wave Hill Walk-Off, a strike by indigenous workers for better pay and conditions. This later became an important influence on Aboriginal land rights in Australia.
- Readers have asked how much the late Brian Oxenford paid for Wave Hill/Cattle Creek at the Vestey’s property auction back in 1992. Beef Central was there (see auction schedule below), and we can report that the properties were passed in to him on the day for $8 million, with about 19,000 Brahman cattle. He later negotiated the holdings for a price understood to be ‘close to $15 million.’ That’s an increase of 593.333pc over 29 years.