S Kidman Co crowdfund bid gathers pace

A crowdfunding campaign and a business broker are teaming up to launch a joint bid for the S Kidman and Co cattle stations after a Chinese bid was blocked.

A crowdfunded Australian bid for the S Kidman and Co cattle stations is gathering pace after securing a new business partner.

Property fund Domacom, which has received around $70 million in crowdfunded pledges from investors, has teamed up with Melbourne-based brokerage firm Lloyds Business Brokers to work on a bid for Kidman which would create more value for shareholders.

"If this transaction were to succeed, it sets the scene for agricultural investments in Australia," Domacom chief executive Arthur Naoumidis told AAP.

Mr Naoumidis said he had recently been given access to the underlying financials of the Kidman business and talked to Ernst and Young which is handling the sales process.

"We're using that information to make a pretty firm offer," he said.

The Domacom-Lloyds bid involves separating the land - Australia's largest private holding - from the operating business of the cattle stations.

Such a structure offers investors choices between the stable return from land or the higher, riskier returns on beef.

Mr Naoumidis said the property and the operating business would still be tied through long-term leases.

Domacom intends to raise $210 million to buy the Kidman land and give investors a 3.9 per cent gross rental yield.

Lloyds Business Brokers will seek investors to lease the land from Domacom and invest up to $160 million to operate the business with a targeted average yield of around 10 per cent.

Treasurer Scott Morrison recently blocked a $371 million bid for Kidman, led by China's Dakang Australia Holdings, on national interest grounds and later said Australia's largest private landholding would not be sold to foreign interests.

Kidman family shareholders are against a break up of the 120 year-old company, which covers 2.5 per cent of Australia's agricultural land and includes 200,000 cattle.

Mr Naoumidis said foreign interests could pay more for Kidman because they had strategic interests rather than economic interests.

Lloyds Business Brokers Victorian Director Chris Butchers said there was already interest from business investors who did not want to purchase land.

"We're expecting interest both from investors and also the pastoral industry," Mr Butchers said.

He said they were interested in a structure that does not require foreign investment approval and offered a lower entry cost to the beef industry.

Source AAP

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