ONE of Australia's largest landholders, S. Kidman & Co, is testing appetite for a partial sale of its business, which includes cattle properties and leases in three states and the Northern Territory.
London-based private equity company Terra Firma – the owner of a majority stake in cattle producer and former Packer properties Consolidated Pastoral – has held discussions with S. Kidman & Co in recent weeks about a potential investment.
Adelaide-based S. Kidman & Co, which was founded in 1899, is the nation's third-largest in terms of cattle numbers and the company produces grass-fed beef for export to Japan, the United States and south-east Asia.
A portion of S. Kidman & Co – sources suggested a stake of more than 50 per cent – is believed to be on the block, with an information memorandum doing the rounds.
Certainly, the industry is moving through a phase of consolidation, with the North Australian Pastoral Company (NAPCO) put up for sale last year.
Terra Firma acquired Consolidated Pastoral, Australia's largest live cattle business and one of the country's biggest station owners, from the Packer family in 2009.
While Consolidated Pastoral already has about 360,000 head of cattle across 5.6 million hectares of land, chief executive Keith Warren is not afraid to scale up.
Warren told The Australian Financial Review last year that difficult market conditions had created "a very good opportunity for us to expand".
Terra Firma was known to have run the ruler over NAPCO last year but price expectations did not match.
S. Kidman & Co reported an after-tax loss of $3.3 million for fiscal 2013.
This reversed a $9 million profit in the last financial year and was principally caused by the market value of its cattle herd decreasing by $20.7 million.
It is said to be worth between $250 million and $300 million.