THE owners of Australia's largest private landholder S. Kidman & Co are in exclusive talks to sell the company to Chinese conglomerate Shanghai Pengxin Group.
As revealed by The Australian Financial Review's Street Talk Online on Sunday, Kidman's adviser, Ernst & Young, informed bidders that it had entered a period of exclusivity with one buyer late last week, which is understood to be Shanghai Pengxin.
Sources said the parties were negotiating a deal worth close to $350 million.
The sale looms as one of the first major takeover tests for Malcolm Turnbull's government, as the deal still requires Foreign Investment Review Board and government approval.
Pengxin has struggled with regulatory approvals in New Zealand in recent months and although the two regulatory regimes are quite different, there is plenty of interest in whether the conglomerate could struggle similarly in Australia.
Sources said the Kidman issue was being tossed around the new government - which was considering whether Pengxin was likely to be a good future operator of the Kidman cattle empire.
It is understood the underbidder in Kidman's auction, China's Donlinks Grain and Oil Company, has not given up hope of securing the assets and may be seeking to return with a new offer involving an Australian equity partner.
Kidman is the country's largest private landholder with 10 cattle stations, a bull breeding stud farm and feedlot covering more than 100,000 square kilometres in regional South Australia, Western Australia, the Northern Territory and Queensland.
It also runs a herd of about 200,000 cattle, worth close to $120 million according to marketing material sent to potential buyers.
EY confirmed that the sale had been delayed due to regulatory approvals last week.