Rich Lister Tinkler’s $5.3 billion bid for Whitehaven goes up in smoke

Coal magnate Nathan Tinkler has abandoned his $5.3 billion bid for Whitehaven Coal at the end of the due diligence period.

If it had gone ahead the deal would have been the biggest of Tinkler’s career and would have established him as a project builder rather than an asset trader.

Tinkler was valued by BRW in May at $915 million and would not have been able to finance the deal alone.

The Rich Lister became Whitehaven’s biggest shareholder earlier this year, holding 21.4% of Whitehaven after completing a merger of his previous coal company, Aston Resources, in April.

Under that deal, Tinkler merged Aston with the larger Whitehaven and got Whitehaven to buy another Tinkler company called Boardwalk Resources.

Earlier this month, Whitehaven granted the Tinkler Group access to due diligence to further develop an indicative and non-binding proposal for a Tinkler Group-led bid vehicle to take Whitehaven private for $5.20 cash per share.

But the due diligence period expired yesterday and the Tinkler Group advised Whitehaven it will not be offering a formal binding proposal of $5.20 cash per share.

In a statement released to the Australian Stock Exchange today, Whitehaven said the data room has been closed and the due diligence process has now ended.

“While the Whitehaven board will always assess carefully firm proposals which are in the best interests of shareholders, the board and management remain focused on developing the company’s portfolio of high quality coal assets to deliver value for all shareholders,” Whitehaven said in the statement.

The collapse of the deal is not entirely surprising with the market sceptical about Tinkler’s ability to get the deal completed since it was announced in mid-July, a scepticism that has been reflected in Whitehaven’s share price, which has been languishing below $4.30, well under the $5.20 a share that Tinkler offered in his takeover bid.

The market’s confidence fell further after another coal company, Blackwood Corp, was forced to enter a trading halt after Tinkler failed to pay $28.4 million he had promised to take a stake in the coal explorer.

Rumours that the bid for Whitehaven was not going to plan were further fuelled after a small construction business placed in administration earlier this month was listed as one of the companies awaiting payment from Tinkler’s construction empire.

This followed reports in Fairfax that Tinkler failed to meet superannuation payments for workers at racing company Patinack Farm.