Farmland on a cloudy day in Western Australia. [Photo/IC]

Australian investment company Australian Rural Capital has announced to the stock exchange it is partnering with Shanghai Pengxin Group to buy S. Kidman & Co, Australia's largest private landholder with properties covering 101,000 square kilometers in Western Australia, South Australia, the Northern Territory and Queensland.

Shanghai Pengxin was forced to rework its initial bid－thought to be around $370 million－after Federal Treasurer Scott Morrison said last year it was not in the national interest for him to approve a sale to a sole foreign buyer.

As well as pairing up with ARC, it is understood Shanghai Pengxin has removed Anna Creek Station from its purchase offer.

The station is the largest single parcel within the Kidman landholding and about half of it lies within the Woomera Prohibited Area in South Australia.

ARC said it would hold a direct ownership stake in the Kidman rural portfolio if the new joint bid was successful.

"It is the current intention of ARC to seek to raise equity funds in the Australian capital markets which will enable Australian investors the unique and direct opportunity to invest in Kidman in a fund and/or investment company managed by ARC," it said in a statement to the Australian Stock Exchange.

ARC, which is capitalized at almost $4 million, said its strategy was to invest in and manage investments in agribusiness and agricultural infrastructure.

Its current focus is cotton, but in an address to shareholders last year, Executive Chairman James Jackson said the company was looking at opportunities in beef, sugar, wine and nuts.

The company's major shareholders include Jackson, who runs a cattle business in northern New South Wales and who is also deputy chairman of Elders Ltd, and Stephen Chapman, the executive chairman of Australian investment bank Baron Partners Ltd and the deputy chairman of natural healthcare company Blackmores Ltd.

Hong Kong-based Genius Link Asset Management is also understood to be bidding for the Kidman empire.

Morrison will make a ruling on the reworked foreign bids after receiving a recommendation from the Foreign Investment Review Board.

If the bid is approved, domestic rivals will have four weeks to lodge a counter offer.

Australian transport magnate Lindsay Fox recently expressed his interest in the Kidman empire, which comprises about 2.6 percent of Australia's agricultural land and 1.3 percent of the country's entire landmass.

S. Kidman owns 185,000 cattle and is one of the nation's largest beef producers, exporting to Japan, the United States and Southeast Asia.

Shanghai Pengxin is a conglomerate in real estate, mining and modern agriculture. In 2012, It acquired Crafar farms and Synlait Farms in New Zealand as part of its efforts to improve its business structure.

Exports of Australian agricultural products to China are expected to increase as a direct result of the China-Australia Free Trade Agreement signed in June last year, said industry experts.

Leading dairy industry expert Song Liang said that, in order to cope with the impact of China's slowing economic growth, the nation's investors are likely to invest more in Australia and New Zealand, particularly in the meat and dairy industries.

ABC News contributed to this story.