The crowdfunded bid for the S. Kidman & Co cattle empire is a long way from achieving its funding goal, but it remains undeterred by a looming deadline for sale bids.
DomaCom is raising money to purchase the Kidman lands, which it values at $210 million, while its partner Lloyds Business Brokers is seeking capital to buy the business, making the total bid equivalent to the Chinese offer of between $360 million and $370 million.
Chief executive officer Arthur Naoumidis told ABC Rural the company had received between $30 million and $35 million in “cash and firm bids” so far, while Lloyds had received an expression of interest from around 50 “Australian agricultural organisations” worth around $300 million.
“[The July 15 deadline] is a long shot, so we are continuing the crowdfunding campaign because the preferred bidder may still end up being a Chinese interest, and they will have to work with the Foreign Investment Review Board (FIRB).
“So until it is sold, it’s for sale, and until that time we’ll be trying to complete our $210 million book build.”
Federal Treasurer Scott Morrison has twice rejected a bid by Chinese interests to purchase the vast cattle empire, which sprawls across 1.3 per cent of Australia’s land mass.
Most recently, he rejected a Chinese-led consortium, Dakang Australia, which included a 20 per cent local partner, on the grounds that the sale was not in the “national interest”.
Mr Naoumidis said he was confident the DomaCom bid would be successful, despite Chinese interests still expressing a strong desire to purchase the properties and remaining the choice bidder of the Kidman family.
“There’s no guarantee the revised bid by Shanghai Pengxin will be approved when they apply a third time,” he said.
Recently, Chinese billionaire Gui Guo Jie, the chairman of Shanghai CRED, a company involved with the bid for the Kidman properties did not rule out bidding again.
But senators-elect such as Pauline Hanson and Nick Xenophon, who oppose foreign investment, and re-elected MP Bob Katter may cast doubt over that bid.
Scepticism from industry insiders
Agribusiness professionals, including representative groups, bankers, real estate agents and advisors told ABC Rural the structure of DomaCom was highly unusual, and unlike anything they had seen before.
Agribusiness Australia’s Tim Burrows said foreign investment was about
“Our business is about feeding people so we should not be shy about finding ways to fund these projects to produce more, and grow more good quality beef in the case we are talking about,” Mr Burrows said.
“Beef is also a very big export market so having some investment from overseas in it is a good thing, it spreads some risk.”
They were sceptical of DomaCom’s ability to raise the funds, but said given the Treasurer’s unwillingness to see Kidman pass into foreign hands, there was still a slight chance the bid could get over the line.
Mr Naoumidis was aware of the unusual nature of the company, having to seek a number of exemptions from the corporate regulator, the Australian Securities and Exchange Commission (ASIC), in order to operate.
“The feedback we’re getting from prospective Kidman investors is a degree of uncertainty as to who DomaCom is,” he said.
“The best way to address that is to list on the ASX, which provides an assurance about the standard to which we’re operating.”
DomaCom has already launched its prospectus, and hopes to list on the ASX in the coming months.