Kidman’s operating businesses attracting ‘keen interest’

From
Arthur Naoumidis

Arthur Naoumidis

There is keen interest in the acquisition of the operating businesses of the iconic Kidman Station with Lloyds Business Brokers already receiving about 50 inquiries since marketing began just two weeks ago.

Lloyds Director Victoria Chris Butchers says there is “substantial interest” in this pastoral business, with some parties wanting to acquire the entire operation and others proposing to buy either majority or minority stakes.

“There’s a lot of talk in the market about this business, with most of the interest to date either coming from private equity funds or professional investors who have experience in the pastoral industry. What it undoubtedly reflects is a strong willingness by investors to get a stake in the growing worldwide demand for premium Australian beef.”

Lloyds has entered into an agreement with crowd funder DomaCom whereby the former will find a buyer for the operating businesses and the latter will crowd fund the acquisition of the land. Using the reported Chinese acquisition price of $370 million, it values the land at $210 million and the operating businesses at $160 million.

Butchers says he’s “pleasantly surprised” by the interest. “When we began this process two weeks ago, I was uncertain as to how investors would respond. So to elicit this level of interest in just a short time is very encouraging. It certainly suggests that our strategy of splitting the sale of the land and property is the right approach.

“In our experience, most business investors do not want to invest in property and vice versa because they are two different asset classes, each with their own unique risks and returns.”

DomaCom CEO Arthur Naoumidis says the level of interest in Kidman’s operating business is hardly surprising given the quality of the asset and the rare opportunity to acquire such a sizeable stake in the beef industry.

“Now that there are buying inquiries for the operating business, DomaCom is ramping up its campaign to raise the remaining capital needed to acquire the landholding, with a radio and television campaign set to launch soon.” DomaCom also already received pledges of $75 million from 5,500 investors.

The Kidman Station property portfolio comprises Australia’s largest private landholding, with 101,411 square km of prime pastoral land across 12 properties, including outstations and supporting properties in breeding, feedlot and cropping as well as a head office property in North Adelaide.

It is spread across Queensland, the Northern Territory, South Australia and Western Australia and is home to about 165,000 cattle.

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