December 9, 2015

DomaCom, the self-labeled “fractional property investing platform”, is building a $410 million crowdfunding campaign aimed at self-managed super funds for the purchase and continued domestic ownership of S. Kidman. The deal is being structured based on a valuation of Kidman of between $400 million and $410 million, which would exceed the reported Chinese bid of between $360 million and $370 million that was recently blocked by the Australian government on grounds that the foreign sale was not in the best interest of the country.

"The Kidman family should not feel rushed into accepting an offer from China when this alternative is on the table that would give them a better price, allow individual family members to retain a stake if they wanted to, and better protect the national interests in terms of both national and food security," said DomaCom chief executive Arthur Naoumidis, reports Farm Weekly.

The idea of using DomaCom to crowdfund a rival offer that would give investors access to ownership of the 101,000 square kilometer cattle operation and the largest land deal in Australian history, was developed by Stephen Burgin, senior advisor with the InterPrac group of financial planners.

"There has been a lot of commentary about how Australia needs foreign investment, but we don't, we've got $2 trillion locked up in super," he said, according to Farm Weekly. "SMSF investors have well over $130 billion sitting in cash earning two percent or less, so the chance to deploy some of that into a strategic asset like Kidman Station where they can earn an eight to nine percent return is bound to be attractive.”

The crowdfunding campaign was scheduled to be pitched to 50,000 investors on December 9 with a minimum subscription of $2,500. Based on an average participation of $35,000 each, it is estimated that 10,000 subscribing investors would be needed to fund the offer.

S. Kidman & Co. accounts for 2.5% of Australia’s agricultural land, and includes 17 pastoral properties and three properties involved in breeding, cropping, and feedlot activities. The group runs 185,000 head of cattle across the Northern Territory, Queensland, and Western Australia, and saw net profits exceeding $50 million, or `15% return on capital in 2014.