The board of iconic pastoral business S. Kidman and Company has unanimously recommended shareholders accept an increased $386.5 million bid from Gina Rinehart’s Australian Outback Beef (AOB) joint venture.
The partnership is between Mrs Rinehart’s Hancock Prospecting and Chinese firm, Shanghai CRED Real Estate Stock Company which has a 33 per cent stake in AOB.
However, Hancock Prospecting has offered to buy the Kidman estate outright if there are any roadblocks to the current offer put up by the Foreign Investment Review Board (FIRB) or government authorities in China.
AOB has lodged documentation with the Australian Securities and Investment Commission (ASIC) to launch AOB’s takeover offer.
The decision to lift the bid from its previous $361m offer made on October 7 follows last week’s move by an all-Australian pastoral consortium to offer $386m.
All other terms of the bid implementation agreement, including plans to on-sell the Kidman company’s Anna Creek Station and “The Peake” to a third party, remain in place.
A statement from Kidman directors said they had carefully considered the increased offer by AOB and unanimously recommended it be accepted unless a more superior proposal emerged.
A target’s statement, prepared by Kidman concludes the AOB offer is fair and reasonable.
Mrs Rinehart said she stood behind the bid.
If FIRB or PRC approvals were not be achieved “Hancock Prospecting will proceed with the acquisition on a 100 per cent basis”, she said.
“I hope this provides shareholders with significant comfort.
“When they consider the offer they can do so in the knowledge that there is no FIRB or Peoples Republic of China execution risk, and further that we have the money to invest to properly maintain the stations and their hard-working staff.”
S. Kidman and Co 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.
Mrs Rinehart said the potential to acquire the Kidman business meant a great deal to her personally.
“I hold in high regard the legacy of the great Australian, Sir Sidney Kidman,” she said.
“Sir Sidney Kidman has special meaning to me given our families historical ties dating back more than 100 years when my grandfather, James Nicholas, owned stations together with Sir Sidney in South Australia and they jointly owned a successful coach business in the east as well as in West Australia.
“They respected each other and were friends.
“I am from a station background, having grown up on “Mulga Downs” and “Hamersley” stations both in the outback.
“It was a childhood that developed resilience and one I loved.
“I still have Mulga Downs Station today.”
She reiterated it was AOB’s commitment to invest and grow Kidman and Co.
AOB had capacity and ability to access additional markets vital to any credible plan to grow Kidman in a sustainable way.
It would not be breaking up the core business.
Kidman chairman, John Crosby, welcomed AOB offer increase and acknowledged the strong credentials of the company led by Mrs Rinehart.
“Under the Hancock joint venture offer the core Kidman business will remain intact and the Kidman staff and legacy will be looked after,” he said.
AOB has confirmed it would retain Kidman’s Adelaide head office and staff and “create more jobs in rural communities where they are so desperately needed”.
More than 600 interested parties have held discussions with sale manager Ernst and Young since the iconic Kidman landholding went on sale almost 18 months ago.