Rinehart consortium ups Kidman bid to A$386.5m

The Sino-Australian group has increased its bid by A$21.5m, with a promise from Australian billionaire Gina Rinehart to buy S Kidman herself if the deal doesn't get FIRB approval.

Gina Rinehart’s Hancock Prospecting and Shanghai CRED Real Estate have raised their A$365 million ($277.14 million; €248.15 million) offer for Australian cattle business S Kidman to A$387 million, after all-Australian consortium BBHO offered $386 million for the company.

Rinehart also stated that if the buyout does not gain Foreign Investment Review Board approval, Hancock could make a solo bid.

“I stand behind the bid and should FIRB or PRC approvals not be achieved, then Hancock will proceed with the acquisition on a 100 percent basis,” she said, adding that she hoped this would help shareholders consider the offer without worrying about any execution risk for the deal.

She also reiterated that her Australian Outback Beef consortium, in which Shanghai CRED has a 33 percent share, would not break up S Kidman’s core business.

More than 600 parties have approached S Kidman’s sale manager EY in the last 18 months after S Kidman was put on sale.

At the end of April, Australian Treasurer Scott Morrison turned down a Chinese-led bid for the S Kidman cattle business for the second time. Chinese dairy giant Shanghai Pengxin’s Australian interest, Dakang Australia, had agreed to buy S Kidman for A$371 million in consortium with Australian Rural Capital and Shanghai CRED.

The Australian Outback Beef joint venture’s 33 percent foreign ownership would be below the current 33.9 percent foreign interest in Kidman.

Hancock, a natural resources and mining businesses holding company, has been enlarging its agriculture portfolio this year. It also recently invested $300 million in UK natural fertiliser business Sirius Minerals, a deal which also gives Hancock rights to buy at least 20,000 tonnes of fertiliser a year for its Australian agricultural projects.