SYDNEY The Australian government on Friday blocked the sale of S. Kidman & Co, the country's largest private land holding, to a Chinese-led consortium for the second time in six months, again saying the sale is not in the national interest.
Treasurer Scott Morrison said he had given China's Hunan Dakang Pasture Farming Co Ltd (002505.SZ) and Shanghai CRED Real Estate Stock Co Ltd until Tuesday to address the government's concerns over the A$371 million ($288 million) offer.
Ownership of farmland is a sensitive issue in Australia amid concerns that foreign buyers are snapping up properties to cash in on a boom in Asian food demand. The government's finding comes just weeks before the country holds federal elections.
Morrison said he was concerned about S.Kidman's vast land assets falling into offshore hands and the difficulty of Australian bidders in launching a rival offer because of the size of the holdings.
The Kidman lands are about 2.5 percent of Australia's agricultural land.
Morrison rejected a previous Chinese-led offer for the ranching company - whose land holdings are the size of South Korea - just six months ago. That denial led S. Kidman to eliminate some lands from the current offer to Hunan Dakan and Shanghai CRED.
S. Kidman said they were "disappointed and confused" by the Treasurer's decision.
The Chinese bidders will go back to the government to ask "whether any kind of further remix of Chinese and Australian investment in the consortium would be acceptable and whether or not there is land area and herd size limits that may be acceptable," said Greg Campbell, S. Kidman's chief executive officer and managing director.
An Australian company, DomaCom attempted to crowd fund about A$400 million from self-managed superannuation investors to purchase S. Kidman.
"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," said Morrison.
The previous offer for S. Kidman by two Chinese companies, Genius Link Asset and Shanghai Pengxin, had raised red flags because Kidman's Anna Creek cattle station in South Australia state is close to an Australian military rocket test site.
Kidman had agreed under the new deal to remove Anna Creek from the sale.
Kidman's 10 cattle stations cover more than 100,000 sq km (25 million acres) of land spread across Western Australia, the Northern Territory, Queensland and South Australia.
(Reporting By Jane Wardell and Colin Packham; Editing by Christian Schmollinger)