Even though S. Kidman announced earlier this month that it had agreed to be acquired by a Chinese-led consortium of Chinese and Australian buyers for A$370.7 million (US$287.3 million), the bidding battle for the cattle empire may not be over. Australian investment firm DomaCom contends that there is still a possibility that it will be able to outbid China’s Dakang Australia and its partner, Australian Rural Capital (ARC).
GAI News first reported on DomaCom in December 2015 when the self-described “fractional property investing platform” announced it was building a $410 million crowdfunding platform targeting the purchase and continued domestic ownership of S. Kidman. At the time, DomaCom chief executive Arthur Naoumidis toldFarm Weekly, “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.”
Despite S. Kidman’s acceptance of the Dakang Australia-ARC bid, DomaCom is reportedly preparing to make a counter offer while the original deal has been placed temporarily on hold by the Foreign Investment Review Board (FIRB) until late July while the deal is being reviewed.
“We’ll be on some time in the next month – we only have to beat $370.8m to force the Kidman board to review its options,” Mr. Naoumidis told Farm Weekly.
Since December DomaCom has been promoting the crowdfunding ideology to a wide range of domestic investors including the country’s super funds. In that time, the firm has gathered commitments from 5,000 investors totaling $70 million. 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.
“For the land we believe we should be able to generate a five percent rental yield, then of course capital growth,” Naoumadis told News.com. “The operating business we estimate will give between a 13 to 15 percent return.”