- Ranch larger than Israel split off to allay security concerns
- S. Kidman & Co. attracts at least one new bid, MD says
One of Australia’s most iconic cattle companies, with ranches that span an area more than twice the size of Switzerland, is being broken up to clear the way for a foreign takeover.
The government last month blocked the sale of S. Kidman & Co. to an overseas buyer, saying the proximity of one of its ranches to a weapons testing range could compromise national security. Now the 116-year-old company is preparing to carve off its biggest ranch, Anna Creek, and offer it separately to existing shareholders or an Australian buyer.
Founded in 1899 by so-called Cattle King Sidney Kidman, the company’s ranches span 101,000 square kilometers (39,000 square miles), or about 1.3 percent of Australia’s total land area, and carry about 185,000 cattle. Hiving off Anna Creek, about a quarter of the total property, weakens the company’s ability to drought-proof its business through ranches in different rainfall zones.
Managing Director Greg Campbell said in a statement Friday the carve-up was “undesirable” though necessary to address the government’s national security concerns.
Kidman had attracted bids from China’s Shanghai Pengxin Group and Hong Kong-based investment firm Genius Link Asset Management, a person with knowledge of the matter has said. Pengxin offered about A$350 million ($254 million), the Australian Financial Review has reported.
At least one of the final bidders has submitted to the government a fresh offer that excludes Anna Creek, Campbell said in a telephone interview from his office in Adelaide. He declined to name any suitor or say how much was offered.
Stripping out Anna Creek -- the nearest station to Kidman’s cattle-fattening operation in South Australia -- could shape how the company is run under new ownership. A new owner could mitigate the loss of Anna Creek, which is bigger than Israel, by focusing more on live cattle exports out of northern Australia, Campbell said.
The sale process is now likely to run into January at least, he said.