The $370 million deal has been pigeon-holed following Treasurer Scott Morrison expressing concern about the property portfolio being offered as a single aggregated asset, which he believed made it difficult for Australian bidders to make a competitive bid.

Dakang and its 20 per cent local partner, Australian Rural Capital (ARC), will also terminate the current bid implementation agreement (BIA) with Kidman and Co.

Kidman is now re-opening the gates for new foreign or local bidders to buy the entire outback beef cattle operation’s 10 station aggregations.  

Kidman managing director, Greg Campbell, said faced with a tight 96 hour timeline to respond to the Treasurer’s comments, withdrawing Dakang’s FIRB application and the BIA was “really the only option available”.

He said despite the Treasurer’s view, Kidman family shareholders had shown firm resistance to seeing the 11 million hectare company broken up.

“Kidman is typical of many large agricultural pastoral holdings in that the value of the business comes from the strategic advantage in having a geographically spread portfolio of properties,” Mr Campbell said.

“The integrated cattle production system provides economies of scale, and flexibility in managing cattle movements between locations to maximise the use of feed resources, mitigate the impact of poor seasons and provide access to a range of end markets.”

“A break up of the business to sell properties separately would result in significant reduction in Kidman’s value.”

He said breaking up the landholding structure would also reduce production efficiency of up to 3000 tonnes of beef annually, cut 50 jobs from the present structure, and lower tax revenue for the country.

The Chinese-led syndicate’s proposed $46m in new capital investment to support growing the herd to 220,000, and the addition of up to 50 new jobs in northern Australia, would also now be abandoned.

Kidman had consulted extensively with Dakang and ARC after Mr Morrison aired his preliminary view that the size and significance of the company’s portfolio made its acquisition by an 80pc Chinese-run consortium “contrary to the national interest”.

Mr Campbell said Kidman and Co would continue discussions with these preferred bidders to address some of the concerns raised by the Treasurer.

However, Kidman was no longer bound by the relevant exclusivity provisions of the previous deal.

The company was also seeking more clarity from the federal Government around the level of foreign investment it was deemed acceptable.

Mr Campbell noted S.Kidman and Company’s family shareholders included a third who lived overseas, making the business 34pc foreign owned.

More than 130 Australian parties had approached as potential buyers as part of the initial sale process which commenced a year ago.

Late-stage Australian parties had also been given the opportunity to acquire the business through the opening up of a secondary process in March.

“It is important to note that no final bids were received from Australian parties at any time during the extensive and lengthy sale process,” Mr Campbell said.

Kidman and its legal team at EY (Ernst and Young) would continue  welcoming Australian parties expressing interest in acquiring the business in its entirety.

“We also welcome interest from anywhere around the world, including the USA, Chile and New Zealand,” he said.

“Investment by non-government entities at this scale from these countries requires no approval from the FIRB or the Treasurer.”

- The Land