The UK’s Pension Protection Fund (PPF) has acquired a minority stake in an Australian cattle station operator, partnering with local Superannuation schemes.
The deal, agreed by QIC, the investment manager owned by the state of Queensland, will see the consortium acquire an 80% stake in North Australian Pastoral Company (NAP) for an undisclosed sum.
The Foster family, previously NAP’s largest shareholder, will retain the remaining 20% stake.
While the deal’s price was not disclosed, the consortium bought a 34% stake in NAP from the listed MP Evans Group, which announced on the London Stock Exchange an AUD18.50 (€12.04) price per share, equivalent to $79m (€68.7m).
Alan Goodman, senior portfolio manager at the PPF, told IPE Real Estate the fund would acquire 19.9% of NAP as part of the deal, and that the asset would sit within the timberland and farmland portfolio first created as part of the 2012 review of its asset allocation.
Damien Frawley, QIC’s chief executive, said the manager was “very proud” to be leading the investment in Australian agriculture, backed by assets from an unnamed number of Superannuation funds.
“This landmark deal was made possible by our unique government heritage and it captures the benefit of our networks of institutional investors and connections to Asian corporate relationships,” Frawley said.
Marcus Simpson, who oversaw the transaction on behalf of QIC, said the Australian food sector was entering a period of exciting development.
“Our vision for NAP is to see it prosper by capitalising on strong beef demand driven by growth in Asia, which is expected to account for 47% of global beef demand by 2024,” he added.
NAP is among Australia’s largest beef producers.
It operates 13 cattle stations in the state of Queensland and the Northern Territory, with a 178,000-strong cattle herd across 5.8m hectares.
The transaction was announced days after the Australian federal government all but vetoed the acquisition of S Kidman & Co, another large Australian beef producer, by Dakang Australia Holdings.
Australian treasurer Scott Morrison said last month he had reached the preliminary decision that the AUD370m acquisition by the Chinese company was “contrary to the national interest”.
S Kidman is the single-largest private owner of Australian land, owning 2.5% of agricultural land and around 1.5% of the continent’s overall landmass.
After an earlier failed attempt, Dakang submitted a revised proposal in April, which Morrison said would still have seen the company own 2% of agricultural land nationally.
He emphasised that the Australian government was open to foreign direct investment but that it had to occur “on our own terms”.
The PPF’s minority stake in NAP is likely to fall below the review threshold set for UK investors, which triggers a review by the Foreign Investor Review Board.
The threshold for foreign real estate investments was recently quadrupled to AUD252.