DomaCom, Lloyds deal reignites Kidman bid

24-May-2016

By Daniel Paperny

Email Article Print Article

DomaCom will reinvigorate its crowdfunding bid for the S Kidman and Co agricultural station in a move that will see it partner with Lloyds Business Brokers and separate the agricultural asset’s operating businesses from land ownership of the site.

The announcement comes after Treasurer Scott Morrison blocked a $370 million bid by Dakang Australia Holdings earlier this month.

DomaCom chief executive Arthur Naoumidis noted the government’s concerns over Kidman “slipping into foreign ownership” and said the new joint offer from DomaCom and Lloyds would be valued at $210 million for the land and $160 million for the operating businesses.

“What this means now is that we have a complete transaction, because without that we couldn’t proceed with the negotiations,” Naoumidis said.

“Starting this week, we’re going to commence an extensive radio, internet and TV campaign to get the crowdfunding up and running again.”

DomaCom’s crowdfunding campaign for the site, which was paused in January, resulted in interest from 5000 local retail investors and over $70 million pledged in the space of three months.

Lloyds Victoria director Chris Butchers said the company expected to receive significant interest from equity funds and professional investors, with growing momentum behind the ownership of agricultural land and agribusiness in Australia.

“It reduces by 60 per cent the entry cost for Australian bidders and it means that there’s a much lower entry point for people who want to run the farm,” Butchers said.

“This is an unprecedented opportunity for Australian business investors, which is also unusual in the agricultural sector as a whole, being one of Australia’s largest property deals. From Kidman’s point of view, it gives them an opportunity to sell the whole enterprise without breaking it up.”

Naoumidis said separating the ownership of the land and operating businesses would allow DomaCom to reach out to more investors, particularly as the move did not require approval from the Foreign Investment Review Board.

“What this enables us to do is find investors for each asset so we’re getting the best price on the land,” he said.

“It shows that we can open the Australian investment markets for Australian agriculture – we need to put the Australian agricultural world into a corporate footing.”

Reluctance from industry super funds and asset managers to engage in Australia’s agricultural sector remained a significant barrier that needed to be overcome, with Naoumidis arguing an investment in Kidman Station should be regarded as a socially responsible move for Australian investors.

“Surely advisers should be looking at this … it would give investors a gross rent of 3.9 per cent in addition to capital growth, low volatility and the opportunity to keep an Australian agricultural icon in local hands,” he said.

« Back to Articles