Gina Rinehart’s Hancock Prospecting Pty Ltd, Shanghai CRED Real Estate Stock Co Ltd and S. Kidman & Co Ltd (Kidman) have announced today that they have entered into a Bid Implementation Agreement (BIA) under which a joint venture company Australian Outback Beef Pty Ltd (AOB) owned 67 per cent by Hancock and 33pc by Shanghai CRED has committed to make a takeover offer to acquire the Kidman and Co.
In a statement to the media issued by a public relations company acting on behalf of Kidman and Co and Hancock Prospecting, it was revealed the offer was conditional on approval from Australia’s foreign investment regime and Chinese government approvals.
It is also conditional on the completion of the divestment of the Anna Creek station and the Peake by Kidman to other Australian grazing interests.
The proceeds from the sale of Anna Creek and the Peake will be paid to Kidman and retained in the company for the benefit of AOB, effectively reducing the “net price” being paid by AOB for the remaining Kidman portfolio to approximately $365M.
A joint venture move by Ms Rinehart for Kidman was touted by Fairfax Media last month. Read that story here.
Chairman of the Hancock group Mrs Gina Rinehart said she was pleased to have the opportunity to invest further in Australia's cattle holdings through the acquisition of the Kidman stations and was looking forward to working with the Kidman management and staff to grow and develop the operations.
“Kidman is an iconic cattle business established more than a century ago by Sir Sidney Kidman. It is an operation founded on hard work and perseverance by an outstanding Australian, and is an important part of Australia’s pioneering and entrepreneurial history,” Mrs Rinehart said.
Garry Korte, CEO of Hancock said, “The quality of the Kidman herd and channel country properties complement Hancock's existing northern cattle properties, and align well with Mrs Rinehart’s plans to build a diversified cattle holding in Australia, taking advantage of integration opportunities.”
The Hancock family started their first cattle station in North West Australia, and founded the first port in the area at Cossack on the West Pilbara Coast to enable the cattle trade. Since then Mrs Rinehart has extensively grown the Hancock portfolio of cattle stations.
Principal of Shanghai CRED Mr Gui Guojie said that partnering with leading local business Hancock had already proved to be a productive approach and that he looked forward to having the opportunity to work with Hancock through the Kidman investment.
Chairman of Kidman John Crosby welcomed the signing of the BIA and said Kidman shareholders were pleased that an agreement had now been signed with the highly respected Australian business Hancock, working together with Shanghai CRED.
“We welcome the significant investment proposed in addition to the purchase price and are confident that the Kidman business will be in good hands”, Mr Crosby said.
More than 600 interested parties have held discussions with sale manager Ernst & Young since the iconic Kidman landholding went on sale almost 18 months ago.
S. Kidman & Co Ltd is one of Australia's largest beef producers, with an average herd carrying capacity of 185,000 cattle. The company has pastoral leases covering 101,000 square kilometres across South Australia, Western Australia, Northern Territory, and Queensland.
Within Kidman’s property portfolio there are 19 individual properties operated as 12 enterprises, being ten cattle stations, a bull breeding stud farm and a feedlot.
Should the transaction proceed to completion then the level of foreign ownership of S. Kidman & Co will reduce from the existing level of 33.9pc currently foreign owned, today’s statement said.
More analysis to come.