Kidman suitor wants more The Hong Kong-based private-equity fund...

Kidman suitor wants more
The Hong Kong-based private-equity fund touted as one of two frontrunners in the race for the Kidman cattle empire has set its sights on a series of even larger deals worth up to $1 billion as it builds an Australian foothold for its global agribusiness aspirations.
Genius Link Assets Management is understood to be in discussions with Consolidated Pastoral Company and the Australian Agricultural Company as it searches for potential local investment opportunities.
GLAM vice-chairman Joel Chang declined to comment on individual negotiations but said he had “definitely been talking to the big four red meat producers” as it began work on live cattle import infrastructure in China.
“We have a strong belief in the industry. We still believe Kidman would be one of our best chances because, apart from the scale and its long track record, its brand name has a long heritage in Australia,” Mr Chang said.
The fund has lobbed a bid of more than $370 million for the Kidman family’s sprawling cattle portfolio, and is in a tight race with at least two other suitors: Chinese property billionaire Jiang Zhaobai’s Shanghai Pengxin and trucking tycoon Lindsay Fox.


British private equity outfit Terra Firma is seeking $300m in fresh capital for CPC, which it purchased from the Packer family in 2009. CPC has a portfolio of 20 cattle stations, covering 5.7 million hectares of land, valued at about $735m, while the Kidman pastoral empire spans 10 stations, or more than 10 million hectares.
CPC has previously unsuccessfully attempted to supply whole carcass beef to China, and last year began working on new strategies to extend its reach into the booming market.
Mr Chang said GLAM would spend between $280m and $700m building processing facilities at two of five Chinese ports designated by the government last year as live cattle import operations.
“It will be industrial processing; we will treat the cattle well, unlike what may have happened in the past, so we are building feed lots, slaughterhouses and cold storage — the whole value chain within the port,” he said.
That investment is separate to the $1bn the fund has earmarked for acquisitions in Australia as it builds a global agribusiness operation.
A deal with AACo could be more difficult, with the company listed on the Australian Securities Exchange, although three major shareholders own nearly 70 per cent of the company between them.
Those investors are the Chris Corrigan-backed Kaplan Equity Investment, British billionaire Joe Lewis through his Tavistock Group, and a Malaysian-Middle Eastern consortium.
GLAM is also looking further afield, including at dairy and consumer-focused firms, with Mr Chang telling The Australian that Burra Foods was also of interest, though the focus remained on red meats for now.
DataRoom reported that bids for Burra Food closed last week, and it was unclear whether GLAM was on the shortlist for the Moelis and ANZ-run process. Other interested parties are expected to include Saputo, Fonterra and Japan’s Itochu Corp — already a minority shareholder.
GLAM, if successful in its purchase of S. Kidman & Co, would use the company name as its brand as it markets beef to China, the US and elsewhere.
Mr Chang said the fund’s investment in Australia, Riverina Oils and Bio Energy — one of the country’s largest integrated oilseed crushing operations — was already exporting not just to China but to the US, South Korea, Japan and the Middle East.
“We can see that in terms of financial returns, the good reception Australian produce has in the world, and we’d like to make investments here to build an Australian multinational food produce company. Australian food produce is the best quality because of the environment, the integrity of the farmers and the food quality across the whole value chain.”
Despite Mr Chang’s bullish outlook, opposition from the National Party, including from the party’s new leader Barnaby Joyce, could stymie his acquisition plans. Mr Joyce urged local investors last week to “understand the value being placed on Australia’s agricultural assets by foreign investors”.
Treasurer Scott Morrison has vetoed an earlier deal to purchase Kidman, with the company having to remove the largest property — Anna Creek, which overlaps the Woomera Prohibited Area military zone — from the portfolio sale because of security concerns.
Local buyers, including Mr Fox, will have an advantage. Once the Foreign Investment Review Board allows one or both of the overseas bids to continue, they must lodge their bids with the Australian Securities & Investments Commission for a four-week statutory period — enough time for a local bidder to lob a higher offer.
The Australian