ONE of Australia’s largest privately owned family companies Linfox is making a late charge to spend up to $350 million trying to buy the iconic Kidman & Co cattle station empire.
Weekend reports suggested Australia's largest family owned landholding was set to be approved for sale by the federal government, to the Chinese owned Shanghai Pengxin Group.
The reported $300m bid by the privately owned Chinese conglomerate of real estate and high-tech interests had eclipsed interest from other foreign buyers and secured Australian partners to appease Foreign Investment Review Board concerns (FIRB).
It comes after Federal Treasurer Scott Morrison rejected the Kidman sale to Chinese bidders last November, citing national security concerns linked to the Anna Creek component of the extensive multi-State property portfolio.
However, he left the door open to recalibrated offers from a pack of swarming foreign buyers, to exclude links to the military weapons testing activities, in the Woomera Prohibited Area.
Asked to clarify media reports of the new Chinese offer that’s supposedly met those conditions, a spokesman for the Treasurer said the FIRB was currently considering revised applications and then would subsequently provide advice to the Treasurer.
"The government does not comment on the specifics of an application or proposal so as not to compromise the integrity of the independent process,” a statement said.
However, Fairfax Media understands the $3 billion Linfox logistics empire founded by trucking magnate Lindsay Fox - now largely run by three of his sons Peter, Andrew and David - has the desire and financial capacity to lodge a serious bid for Kidman.
Andrew Fox runs the company’s property division and is understood to have held recent talks with senior government officials about making a potential offer.
Mr Fox declined to make any formal comment when contacted by Fairfax Media.
But sources close to the family and government say Linfox is genuinely interested in buying the business and retaining its current structure, under Australian ownership.
It’s understood Linfox views the potential acquisition as a legitimate commercial opportunity aligned with the company’s extensive logistics business throughout Australia and expanding supply chain networks in Asia.
The backers want to retain the cattle empire’s current structure rather than it potentially being carved-up into smaller parcels, to meet any potential restrictions imposed by the FIRB or Treasurer, if sold to any foreign owners.
Sources said the $300 to $350m price tag currently being touted for Kidman & Co would also be easily within Linfox’s reach, given its current $3b annual turnover.
Sale coordinator Don Manifold of Ernst & Young Adelaide declined to comment on whether Linfox had formally submitted an offer to buy the cattle empire, outlining proposed conditions and addressing any national interest concerns.
But Mr Manifold said several bidders had recalibrated their proposals following the Treasurer’s rejection decision last November.
He said a shortlist of those bidders had been presented to the Treasurer and they were now awaiting a response, to see if any concerns are raised regarding the approvals process, in line with the FIRB’s national interest test.
The Kidman & Co pastoral operations represent 2.5 per cent of the nation’s farmland operating across 10 stations in three States posing headaches for the government’s assessment of the underlying national interest test.
Federal Agriculture Minister Barnaby Joyce said he understood several Australian buyers were in the market place, actively interested in acquiring the Kidman & Co asset.
Mr Joyce said his “obvious preference” was always for Australian farmland or agribusiness assets to be retained under local ownership; a view also shared by the Australian people.
He said that stance did not preclude foreign ownership opportunities and investments which remained important to growing the agricultural sector’s capacity.
Mr Joyce said Australia already had one of the most liberal regulatory regimes “on earth” for attracting foreign investment in agricultural assets and farm land.
However, he stressed it was not “politically incorrect” to state the “bleating obvious” about wanting to retain local ownership; a view shared by people from “every other nation on earth”.
“Those who deride me on foreign ownership will say it’s a xenophobic statement or a volatile or dangerous position and make other derogatory remarks but I won’t be bullied into saying something I don’t believe in,” he said.
“I also know overwhelmingly that it is the view of the people on the street that Australian assets should be owned by the Australian people.”
Shadow Agriculture Minister Joel Fitzgibbon slammed the Coalition government’s handling of recent acquisition applications saying it had been “shambolic” and sent “all the wrong signals to a very competitive market for capital”.
“If the government held genuine national security concerns and they've been overcome then Labor welcomes the latest development,” he said.
“But (Labor) continues to hold concerns that ministers are playing politics with foreign investment to the detriment of the future of Australian agriculture.”
Shadow Treasurer Chris Bowen said the Kidman & Co sale issue had been “dragging on causing great uncertainty for the agricultural sector”.
“This Government always manages to botch key foreign investment decisions,” he said.
But asked what Labor’s position was on the potential sale and talk of the $300m Chinese bid this week, he said “We'll await the final decision of the Treasurer”.
A spokesperson for Mr Joyce said Australian investors also needed to understand the value being placed on Australia’s agricultural assets by foreign investors because of “tremendous opportunities to supply the growing demand from Asian and other markets and the nation’s long-term strong economic prospects”.
“This is the new market reality,” the spokesperson said.
“Mr Joyce will continue to urge Australian investors to wake up to these opportunities, of which the Kidman & Co sale is a prime example.”
