A Chinese-led consortium has declared it will lob another bid for Australia's biggest private landholding, S. Kidman & Co, but will wait until after the federal election.
Dakang Australia – the biggest shareholder of which is Shangai Pengxin Group – will spend the next three months negotiating with Kidman in an effort to finally gain Commonwealth approval.
The decision to work on a fresh offer comes after Kidman chief executive Greg Campbell said the sale got caught in a "political crunch that was unworkable".
Treasurer Scott Morrison blocked the sale on Friday, saying it wasn't in the national interest. But he gave Dakang 96 hours to revise its bid.
Mr Campbell said the deadline was "ridiculous" and Dakang couldn't meet the Treasurer's concerns in that timeframe.
And even if they did, there was no guarantee that the Commonwealth would make a decision on the sale, considering the government is set to enter caretaker mode. Prime Minister Malcolm Turnbull is expected to call an election for July 2 as early as this weekend.
In a statement to the Shanghai Stock Exchange on Wednesday, Dakang confirmed it had terminated its bid following the federal government's preliminary view that it would block its Kidman acquisition.
But Dakang said it would "actively consult with the transaction counterpart over the next three months to reach an acceptable purchase plan". It said it would also work with "Australia finance ministers" to achieve a "viable option".
The negations will be non-exclusive, meaning Kidman can field other offers.
Mr Campbell said potential Australian buyers had expressed interest, but their offers were far below Dakang's which is believed to be about $370 million.
For instance, trucking magnate Lindsay Fox reportedly offered about $270 million for Kidman's portfolio of properties.
"Australian parties have always opportunity to come forward but the reality is none have – not at the sort of levels that the business in worth," Mr Campbell said.
"Whether something shakes out in that respect, I don't know. Realistically, the prospects for an offshore acquisition are still strong but that would have to wait until after the election."
Kidman's portfolio is Australia's biggest private land holding, comprising 1.3 per cent of the country's total land area and 2.5 per cent of all agricultural land.
Dakang sought an Australian partner – ASX-listed Australian Rural Capital, which owned 20 per cent of the consortium – in an effort to allay the Treasurer's concerns.
Kidman also removed Anna Creek – the world's biggest cattle station, which overlaps the defence sensitive Woomera weapons testing range – from the deal, reducing the total land portfolio to 77,000 square kilometres from 101,000.
Mr Campbell said Kidman's shareholders were adamant they did not want further carve up the company's property portfolio.
Before Dakang's statement to the Shanghai stock exchange, Mr Campbell feared it would walk from the deal, considering its major shareholder Shanghai Pengxin bought a Brazilian farming operation for $378 million this week.
The Coalition's preliminary knock back of sale sparked concerns that the Australian government was "slamming the door" on foreign investment.
But those concerns were not shared in China. Gui Guojie, the founder of Pengxin's consortium partner Shanghai CRED – which is primarily a real estate developer but has already invested in agricultural projects in Australia – said the country was still a desirable foreign investment destination.
"Even if we aren't successful [for Kidman] in the end it won't affect our confidence in investment in Australia," Mr Gui told Fairfax Media, after announcing his company's sponsorship of AFL club Port Adelaide – and a deal to have a home-and-away game played in Shanghai next season – alongside Prime Minister Malcolm Turnbull during his visit to China.
In one telling insight into how Chinese investors view Australia's political climes, Hong Tao, Pengxin's chief investment officer, compared the "lots of in-fighting" within Australian political parties to popular Netflix series House of Cards.
"It's exactly the same as what we saw in the House of Cards," he told the China Investment Annual Conference in Shanghai earlier this month.
Mentioning the fact that their previous bid had been knocked back by the Australian government last year, Mr Hong said: "In overseas acquisitions not only state-owned enterprises meet with obstacles, China's private enterprises also encounter difficulties."
"We need to be familiar with policies in different countries and handle government relations well," he said, before adding, somewhat presciently, "it is unimaginable in China that you could own over 100,000 square kilometres of land".
