Plucky property investment group DomaCom is trying to convert about $80 million in public pledges into real money as it pushes ahead with ambitious plans to keep the big S. Kidman and Company pastoral business in Australian hands.
The company has just spent about $200,000 on a month-long television advertising campaign plus radio advertising in eastern Australia urging ordinary retail investors to put their money on the table.
More than 5500 potential shareholders registered interest in becoming Kidman shareholders through DomaCom early this year, many reacting angrily to the prospect of Chinese bidders leading the charge to buy the 117-year-old iconic outback cattle station network.
DomaCom, a crowdfunding-styled managed investment trust business, wants to raise $210m to buy Kidman’s 11m hectares covering 17 properties in South Australia, Queensland, Northern Territory and Western Australia.
Investors must commit a minimum $2500 to be part of DomaCom’s bid, which eventually would involve Kidman becoming an Australian Securities Exchange (ASX)-listed business.
Much of the support early this year came from potential eastern states “mum and dad” investors, including some livestock producer syndicates.
A further $110m to cover the cost of securing the Kidman beef business is apparently already promised from a range of potential bidders keen to run the 185,000 head cattle enterprise as a separate operation, leasing the station land from DomaCom.
Originally a last minute player in the contentious Kidman and Co sale saga, which began in April 2015, DomaCom was frozen out of talks until federal Treasurer Scott Morrison effectively blocked the sale to the Chinese-led Dakang Australia partnership with Australian Rural Capital (ARC) in late April.
The deal dissolved when Mr Morrison expressed unease about insufficient Australian involvement in the bidding process.
Late last year a Chinese bid was also blocked by Canberra on national interest grounds because that offer involved Kidman’s Anna Creek station adjoining the Woomera defence site in SA.
Kidman and Co management is not commenting about the re-started sale process, although DomaCom chief executive officer, Arthur Naoumidis, said his group now talked frequently with the Adelaide-based agribusiness.
“Kidman management has been very open with us and granted access to as much information as we need,” Mr Naoumidis said.
He expected other past bidders to be back in the race, possibly including previous finalist Shanghai-based Dakang.
Meanwhile his bid partner, Queensland-based Lloyds Business Brokers, has registered a total of $300m in potential offers from up to 50 parties keen to operate all, or portions of, the Kidman beef business, if DomaCom buys the Kidman land.
“There seems a strong willingness among ordinary Australians to keep Kidman’s business in Australian hands, although it is taking time to translate that emotional attachment into investors,” Mr Naoumidis said.
He had solid expectations of investment support from a retail superannuation fund “within a few weeks”, thereby setting the wheels in motion for DomaCom to complete its fund-raising.
“A lot of our potential investors have funds already tied up in superannuation, but they want to be able to roll money into a fund which is backing the Kidman business.” he said.
Meanwhile, DomaCom itself is poised to list its fractional property management business on the ASX, with the initial public offering closing on August 19.
“I think having DomaCom on the ASX will also help encourage investor backing for our Kidman campaign,” Mr Naoumidis said.
