Kidman block a boon for Aust investors

03-May-2016

By Daniel Paperny

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The federal government’s decision to block a consortium bid from overseas investors for Kidman Station was a significant win for Australian retail investors and highlighted the importance of local agricultural assets, according to DomaCom.

Federal Treasurer Scott Morrison last week said while Australia welcomed foreign investment, it needed to be wary of any structure that could place Australian investors at a disadvantage.

“Given the size and significance of the Kidman portfolio, I am concerned that the acquisition of an 80 per cent interest in S Kidman & Co Limited by Dakang Australia Holdings Pty Ltd may be contrary to the national interest,” Morrison said.

“I have concerns that the form in which the Kidman portfolio has been offered as a single aggregated asset has rendered it difficult for Australian bidders to be able to make a competitive bid.”

Fractional property investing platform DomaCom launched a crowdfunding bid last year for Kidman Station, currently recognised as the largest private land holding in Australia, to remain a locally owned agricultural asset, with the bid attracting interest from 5000 local retail investors and more than $70 million pledged in the space of three months.

Speaking to financialobserver, DomaCom chief executive Arthur Naoumidis said the campaign demonstrated a genuine public interest in Kidman station from Australian investors.

“Opinion polls have continually shown that ordinary Australians are deeply concerned about retaining our agricultural land, as well as the businesses that flow from them, and what our crowdfunding proposal did was give them the opportunity to give expression to that concern,” Naoumidis said.

“What this demonstrates is a funding model for Australian agriculture that doesn’t depend on us giving away our assets and, at the same time, compensates the current owners commercially.”

He said the Treasurer’s announcement should be heeded as a “wake-up call” for Australia’s large superannuation funds and asset managers, which needed to place a greater priority on local agricultural investment.

“Hopefully it will encourage more retail investors to come forward to invest in Kidman. Aside from the issue of keeping it in Australian hands, the investment reality is that under our proposal the land will be separated from the operating business, with the land expected to return about 8 to 9 per cent to our investors,” he said.

“Firstly, it’s socially a responsible investment and a good return for all the risk you’re taking, and secondly you are shaping a future Australia for your kids and grandkids.”

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