Will Tinkler trade up?

It’s been a rough few months for Nathan Tinkler, the man who earlier this year was named Australia’s youngest ever billionaire.

The company he founded and majority owns, Aston Resources, is developing a coal mine at Maules Creek in New South Wales and progress hasn’t been what Tinkler hoped. So last month he acted.

After becoming chairman, Tinkler booted out CEO Todd Hannigan and CFO Tom Todd – two young men he had helped onto the Young Rich list – and became an independent director. And now he’s clearly looking at other options for the business.

This morning, fellow coal group Whitehaven Coal has confirmed that it is in merger talks with Aston. The two companies have talked before, but that was then and this is now.

After watching Aston shares slide from $11.12 in mid November to as low as $8.27 and recover to around $9.11 on Friday, Tinkler is obviously more willing to talk.

We shouldn’t be surprised that Tinkler is considering some sort of deal. If Tinkler does agree to a merger with Whitehaven Coal (the current talk is that it will be an all-scrip deal) then it will continue a pattern whereby he builds his fortune by trading assets rather than building actual companies.

Look at the Tinkler track record. In November 2006 – just five years ago – he buys a coal mine for $30 million, after stumping up $1 million of his own money. In June 2007, he sells the mine to Macarthur Coal for $265 million, taking the bulk of his $200 million cut in Macarthur shares. In May 2008, he sells those shares for $445 million. Then he buys the Maules Creek deposit for $480 million in mid-2009, before starting Aston Resources to build the Maules Creek mine and floating the company in August 2010 for $1.2 billion.

It had appeared that Aston would be something different for Tinkler – a chance to actually develop, build and then run a fully fledged coal project. But now he may revert to his traditional strategy of selling at the right price and moving onto the next opportunity.

Certainly Tinkler’s timing is pretty good. When Aston Resources floated, it had a market capitalisation of $1.2 billion; today it is worth $1.98 billion and Tinkler’s personal stake is worth $625 million following a sharp rise in the stock this morning, to $9.68.

If Tinkler can squeeze a good price out of Whitehaven, he looks likely to move on.

As he said when he dumped his CEO and CFO last month, this is a company “coming out of the initial development phase and moving into a construction and operational phase. This requires a different and additional skill set”.

Perhaps a skill set even Tinkler himself doesn’t possess.