Investors bullish on agribusiness opportunities

By Jack Derwin

October 13 2016
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Interest in Australian agribusiness is continuing to strengthen as the sector finds itself in the middle of local and foreign takeover bids.

Investors bullish on agribusiness opportunities

As Nestegg.com.au previously reported, the domestic agribusiness industry has been the target of strong investment, particularly from Asia. This looks only set to grow, most recently highlighted by the lengthy bidding war over iconic Australian entity Kidman and Co.

Crowdfunder DomaCom’s bid failed last week when it was outbid by a joint venture between Gina Rhinehart and Chinese company Shanghai Real Estate Stock Co.

While the crowdfunder’s ‘ambitious’ bid to purchase the famous Kidman was ultimately unsuccessful, DomaCom chief executive Arthur Naoumidis said interest in agribusiness investment remained strong.

“What our Kidman bid demonstrated is the enormous appetite among investors to acquire agricultural assets. People are motivated by a desire to keep prime rural land in Australian hands, as well as the opportunity for steady yield and capital gain,” Mr Naoumidis said.

Buoyed by the level of interest it witnessed in keeping Australian agribusiness locally owned, DomaCom announced it will continue to look for other opportunities in the sector.

“On the back of this campaign, I now believe there is a real opportunity is for us to use this momentum to address the funding issue for our Australian farmers at a more grassroots level,” Mr Naoumidis said.

“We will focus our energies on more attainable rural opportunities that we believe will have significant structural benefits for Australian farmers by keeping families on the land with a minimum of debt and helping prevent the sale of properties to overseas interests.”

To that end DomaCom said it will make a second attempt to acquire a stake in Australia agribusiness, this time through a smaller regional operation.

“We have identified this north Queensland property that has a carrying capacity of 4,500 head of cattle, with a long-term capacity to exceed this number,” Mr Naoumidis said.

“The property has been in the same family for the past 120 years, and what our crowdfunding proposal will allow is for this family to retain a significant amount of the equity in the DomaCom bookbuild, with the capital raised via crowdfunding to be used to pay off bank debt and allow the family to focus on operating the business.”

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