Crowd funding DomaCom bid to buy Kidman gathers momentum
PROPERTY investment firm DomaCom's crowd-funding bid to keep the Kidman cattle empire in Australian hands is gathering momentum.
The company has just started its due diligence process after it was finally invited to the table by Kidman representatives following Treasurer Scott Morrison's suggestion that the sale of the pastoral estate to the Chinese-led Dakang Australia syndicate is not in the national interest.
Dakang subsequently withdrew its $371 million bid for the 101,000sqkm cattle empire, which spreads over the Territory, Queensland and South Australia.
The Treasurer has also announced that any decision on the sale of Kidman will not be made until after the July 2 election.
DomaCom general manager of sales and marketing Warren Gibson told Rural Weekly that those developments gave the bid a much better chance of success.
"We finally received the data we needed from Ernst and Young in South Australia, which allows us to start our due diligence process," Mr Gibson said.
DomaCom's plan, should it be successful, is to split the company into two distinct entities.
One would be as a landholder and the other the operational side of the cattle business.
"We are in discussion with a couple of consortiums of investors to purchase the operational arm of the business and we are confident we will have the required funds available to acquire that should the due diligence prove the business case."
Mr Gibson said they believed the land only would be worth about $160 million, meaning that their crowd-funding plan would need to raise that capital, while the consortium would need to pay about $210million for the business to match the Chinese-led offer made for Kidman.
"We have about 5500 investors who have pledged about $85 million toward the land so far," Mr Gibson said.
"But we really do believe that we will be able to grow that figure if the business stacks up."
Mr Gibson said the operational side would be listed on the stock market if their plan was successful.
"That could potentially give the investors in the land a chance to invest in the whole business."
Mr Gibson said DomaCom also planned to contact members of the Kidman family, who might not want to sell the company.
"We believe we may be able to come up with a shareholding arrangement if any of the family want to retain some ownership."
While the DomaCom plan has become the "poster boy" for people against the foreign ownership of Australian agricultural land and as a result the Kidman sale had become a "bit of a political football", Mr Gibson said they were not against foreign investment in principle.
"We are not against foreign investment at all.
" But what we are arguing is that it must be productive investment where they can't own the land and abuse the system by shifting profits like Ikea and Google have done.
"It has happened in the past where the companies shift the profits and they pay no tax in the country of origin.
"What would be the point of that foreign investment?
"The government needs to have airtight agreements with the foreign owners.
"Things that make sure they are not going to abandon the land, which has happened before, they are not going to sell the products at a discount or profit shift or shed jobs.
"These things need to be absolutely airtight and then you would have productive investment."