Will Rinehart make the $1B bid for CPC?

BILLION DOLLAR BID: Hancock Prospecting's Gina Rinehart has been tipped as a potential CPC buyer.
BILLION DOLLAR BID: Hancock Prospecting's Gina Rinehart has been tipped as a potential CPC buyer.

IT'S been one of the worst kept secrets in industry circles, but it's finally official that Australia's largest privately owned cattle company has been advertised for sale.

The Consolidated Pastoral Company (CPC) runs about 400,000 head of cattle on 16 stations, eight of which are in the Northern Territory, and it also operates two Indonesian feedlots.

Holding about 5.5 million hectares of pastoral lands across the NT, Western Australia and Queensland, everything about the sale of CPC is on a grand scale, and that includes the potential price.

The numbers floating around the industry suggest the company's broad portfolio could be worth about $1 billion.

That price would tend to limit the number of potential buyers that agents Knight Frank and Goldman Sachs could target for CPC's owner, European private equity firm Terra Firma.

However, as the advertisements that have been running in The Australian newspaper state: "Terra Firma - one of Europe's leading private equity firms - is offering the business for sale, as a whole or in parts”.

"In parts” would bring many more players into the mix to pick up some of the prime properties that are contained within the portfolio.

In the Territory alone that portfolio includes the former Packer-owned Newcastle Waters station.

According to the CPC blurb, "Newcastle Waters is a 1,033,101ha breeding property in the west Barkly region of the Northern Territory.

"Its open plains, flood country and timbered sand hills can carry 65,700 head of cattle including 20,000 commercial brahman breeders.

"The property is home to Newcastle Waters Brahman Stud, which comprises 4000 stud females.

"Annually the stud produces 1000 quality, acclimatised herd bulls for CPC's Northern properties.

"Its annual turnoff of 25,000-30,000 head are finished according to market demands, with the steer portion being taken at five to seven months for fattening as Jap ox on the Queensland properties or finished on Lake Woods for export to Indonesia via Darwin port.”

And the Queensland portfolio includes Wrotham Park Station in the Gulf Country, which was purchased by CPC in October 2009 and included "39,000 branded cattle with associated plant and equipment”.

According to CPC "Wrotham Park can run approximately 25,000 breeders or around 47,600 head on its rich riverine flats that are the pick of the Peninsula.

"Located 350km west of Cairns (or 80km west of its local town of Chillagoe), the station has two major river systems, the Mitchell and the Walsh, that make up integral parts of its carrying capacity ensuring a consistent water supply.

"The remainder is a wide selection of tributary creeks, black soil flats, tea tree sand ridges and timbered country.

"The 44 inches of consistent tropical rainfall per annum helps to turn off weaners for backgrounding by other CPC properties, making Wrotham Park a significant addition to the company property portfolio.”

Properties such as those two would make a partial sale attractive to a number of potential investors both locally and overseas.

And given her appetite for beef recently, the main Australian name that has been bandied about by the industry since news of the sale broke is Gina Rinehart, who stands out as a potential buyer.

However, in value terms, the sale of CPC, if sold as a whole, would be almost triple what Mrs Rinehart's Outback Beef consortium paid for S.Kidman and Co in 2016, and would set a new record in Australia's cattle industry.

Topics:  adam giles brahman brahman cattle cattle station consolidated pastoral company cpc for sale gina rinehart gulf country hancock prospecting newcastle waters station northern territory queensland s kidman and co western australia