British private equity firm Terra Firma is aiming to raise more than $1 billion for its Australian cattle stations, sources said, arguing for a hefty mark-up that has already priced at least one local party out of the process.
With first round bids due imminently, the high expectations could leave foreign bidders in the box seat, testing the government’s appetite for foreign ownership of sensitive assets less than two years after it rejected China-led bids for a major energy grid and agricultural company.
Terra Firma, which bought Consolidated Pastoral Co (CPC) in 2009, is seeking a 20 per cent-plus premium to a 2017 asset valuation, two people with direct knowledge of the sale said, arguing that some land can be developed to grow high-yielding crops.
“What they are seeking to do is sell people the idea that they have an embedded option to convert to high-use agricultural land as opposed to just cattle grazing,” said one interested Australian party, who did not want to be named due to non-disclosure arrangements tied to the deal details.
“We can’t get anywhere near the numbers they are talking about,” said the person, who added the guidance was too high for them to bid.