China-based Dakang Australia and Australian Rural Capital (ARC) have withdrawn their A$370 million (US$287.3 million) bid for the S. Kidman cattle empire after Treasurer, Scott Morrison indicated he intended to block the deal, according to The Wall Street Journal.

The sheer size of the operation seems to be a detriment to a successful deal. S. Kidman encompasses a land area equal to 1.3% of the entire country, spreading across three Australian states. Because of this, the government harbors concerns that to sell the company as a single entity to a majority foreign owner would be contrary to the national interest. Kidman & Co. has already agreed to break off its Anna Creek property from the S. Kidman portfolio to satisfy government concerns about its proximity to the Woomera Prohibited Area. However, they are averse to any further breakup as it is believed it would negatively affect S. Kidman’s value.

“I have concerns that the form in which the Kidman portfolio has been offered as a single aggregated asset, has rendered it difficult for Australian bidders to be able to make a competitive bid,” said Federal Treasurer Scott Morrison in a statement, reports The Street.

Greg Campbell, managing director of S. Kidman was understandably disappointed with the decision, particularly since Dakang Australia’s parent company, Shanghai Pengxin, acquired a majority stake in Fiagril, one of Brazil largest agribusinesses.

“We would have liked the Treasurer to have said yes, but in a pre-election environment, it’s difficult and it’s probably best for things to go quiet,” Mr. Campbell said, reports The Advertiser.  “Capital flows around the world. If Australia doesn’t want it, it will go elsewhere. It remains to be seen if they will come back with an offer because I am not sure they can get past Australia’s political obstacles.”

Despite Mr. Campbell’s doubts, Reuters reports that Australian Rural Capital (ARC) announced in a statement that there is intent to pursue a new bid under a new proposal structure, with ARC holding more than the original 20% it held in the first offer.

“I think the consortium will likely amend the ownership structure, and while it is not decided, a fresh approach is likely after the elections on July 2,” an unnamed source told Reuters.

While Dakang and ARC continue to work with the government to determine an acceptable bid and ownership structure, S. Kidman is free to openly accept bids from other potential buyers, including DomaCom.

Since December DomaCom has been promoting its crowdfunding ideology to a wide range of domestic investors including the country’s super funds with the goal of raising an acceptable bid for S. Kidman. In that time, the firm has gathered commitments from 5,000 investors totaling $70 million. Company CEO, Arthur Naoumidis is optimistic that the balance of the bid will be provided by institutional investors. If successful, DomaCom’s plan for S. Kidman is to divest the land assets from the business, so listing S. Kidman would not tie capital in land ownership. Domacom has partnered with corporate advisor Shaw and Partners to help in the process of splitting the business.