This article is from the Australian Property Journal archive
CHINESE conglomerate Shanghai Pengxin Group has finally snapped up the S. Kidman & Co portfolio for more than $370.7 million, after teaming up with ASX-minnow Australian Rural Capital.
The deal is not final and requires the approval of shareholders of the Shenzhen Stock Exchange-listed Hunan Dakang Pasture Farming Co, a company controlled by Shanghai Pengxin, which was founded by Chinese billionaire Jiang Zhaobai.
It also requires the approval of the Australian government, which blocked the sale last year on the grounds of national security.
At the time, both Chinese group Genius Link Group and Shanghai Pengxin were vying for the $350 million Kidman portfolio. Treasurer Scott Morrison refused the application and said around 50% of the Anna Creek pastoral lease is located in the Woomera Prohibited Area, the location of Australia’s top-secret weapons testing base.
Earlier this year, trucking magnate Lindsay Fox wrote to Treasurer Morrison indicating his interest in acquiring the portfolio and other local players kick-started a crowdfunding campaign to raise funds to buy the portfolio.
After its bid was rejected, Shanghai Pengxin last month teamed up with ASX-listed Australian Rural Capital, a company with a market capitalisation of $4.6 million at the time, to submit a joint bid.
As part of the agreement, Shanghai Pengxin via Hunan Dakang will pay over $300 million for a 80% stake in the S. Kidman & Co. portfolio and ARC, which now has a market cap of $5.4 million, will buy the remaining 20% at an estimated cost of $70 million.
Established in 1899 by Sidney Kidman, the portfolio comprises 10 pastoral properties stretching across South Australia, Western Australia, the Northern Territory and Queensland covering 101,411 sq km – larger than Ireland and almost half the size of Victoria.
The portfolio represents approximately 1.3% of Australia’s total land area, 2.5% of Australia’s agricultural land, and managing a long-term average herd of 185,000 cattle – exporting to Japan, Southeast Asia and the United States.
This sale excludes the contentious 24,000 sq km Anna Creek station, which was at the centre of the federal government’s decision to block the initial sale. Anna Creek will be offered to local companies only and is expected to fetch $50 million.
Australian Property Journal