The sale of the world’s biggest cattle station, S. Kidman & Co, is in doubt after it was caught in a “political crunch that was unworkable”, its chief executive says.
Kidman’s preferred bidder, Chinese conglomerate Shanghai Pengxin Group, withdrew its bid on Tuesday, days after Treasurer Scott Morrison blocked the sale for a second time, saying it was not in the national interest.
Mr Morrison on Friday gave Pengxin and its Australian partners 96 hours to revise their bid, but Kidman chief executive Greg Campbell said that timeframe was “ridiculous” and the only option was to withdraw the offer entirely.
“Given that there are four sizeable companies involved with directors and shareholders in four continents and four time zones, it was a ridiculously short timeframe to do anything,” Mr Campbell said.
“So in discussion with us, they have withdrawn their application from FIRB [Foreign Investment Review Board] and withdrawn their bid for Kidmans.”
The S. Kidman & Co portfolio is Australia’s biggest private land holding, comprising 1.3 per cent of the country’s total land area and 2.5 per cent of all agricultural land.
No new bid until after election
Mr Campbell said Pengxin might submit another bid, but it would not happen until after the federal election.
He feared the Treasurer’s decision risked slamming shut Australia’s foreign investment window, considering that Pengxin had just bought an agricultural operation in Brazil for $378 million.
“Capital does flow around the world and, in this case, capital has flown to a competition business in Brazil that will definitely be competing on beef and grain markets with Australian products.”
Mr Campbell criticised the Coalition’s handling of the sale, saying Prime Minister Malcolm Turnbull’s calling of a double dissolution election had scuttled the sale.
He said when Kidman’s preferred buyer applied for review board approval in November, an election was thought to be 10 months away, which would have allowed “ample time for such a consideration to be made”.
“But an earlier than expected election and incredible delays in the decision process led to a political crunch that became unworkable,” Mr Campbell said.
“It’s been a rollercoaster ride and the politics of this thing have been particularly difficult to read. We have had periods where in all logical assessment we had addressed all of the commonwealth’s concerns.”
These measures included excising the Defence-sensitive Anna Creek and The Peake stations, which overlap the Woomera weapons testing range, reducing the total land portfolio to 77,000 square kilometres from 101,000.
But Mr Campbell conceded the Coalition was “under pressure from various quarters and in this case finally chose not to approve the 80 per cent Chinese, 20 per cent Australian consortium”.
He said the Kidman family was adamant it did not want to carve up the portfolio further and said although some Australian buyers had expressed interest, their offers had not come close to the value of the landholding.