Just when it seemed the big money battle for the S. Kidman and Company pastoral empire was finally won with a Chinese-led deal, local investment hopeful DomaCom insists it is still in the game.
Its unconventional crowdfunding-styled campaign has been raising funds from Australian “mum and dad” shareholders and is confident about soon outbidding the $370.7 million offer from China’s Dakang Australia.
Darkang’s bid is assisted by 20 per cent partner Australian Rural Capital (ARC), a listed agricultural investment group run by former merchant banker turned agribusiness director James Jackson.
He is offering Australian investors the chance to be part of the 750,000-hectare Kidman deal via shares in his Australian Securities Exchange (ASX) listed investment trust.
But DomaCom chief executive, Arthur Naoumidis, dismissed ARC as a $5 million shell company providing local “window dressing” for the Chinese bid, which is largely backed by mining, real estate and ag conglomerate Shanghai Pengxing which has had a chequered background in farming.
Mr Naoumidis said his property fund group was rustling up genuine Australian investor and institutional backing which Kidman and Company directors would not be able to ignore.
While Foreign Investment Review Board approval for the Dakan-ARC deal is on ice until late July as Treasurer Scott Morrison awaits a review of the sale’s national interest implications, DomaCom is preparing its counter-offer.
“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,” he said.
He said some existing Kidman family shareholders wanted a local investment push succeed - and to cover the company’s full 10.1m hectare 10-property portfolio - so they could contribute and retain a stake in the iconic business.
Since December DomaCom has used internet crowdfunding strategies to highlight the Kidman sale to potential small investors, including the self-funded superannuation market.
It has $70m in pledges from about 5000 investors and expects institutional investment backing to support its plan for the 117-year-old pastoral business founded by cattle king Sir Sidney Kidman.
DomaCom’s strategy would split the land assets from the business so an ASX-listed Kidman and Co operated without tying up shareholder capital in land ownership.
The Kidman properties would be owned by DomaCom investors (with their investment backed by the Perpetual Trustee group) and leased back to the listed beef business to earn about $8m annually in rent.
“We believe we can beat the Chinese,” Mr Naoumidis said.
His property fund was also raising about $20m to support similar farmland investments in South West NSW and North Queensland, to be leased back to their current owners.