Nathan Tinkler’s next big adventure: A $4 billion takeover of Whitehaven Coal

Coal magnate Nathan Tinkler is eyeing the biggest deal of his career – a $4 billion takeover of Whitehaven Coal.

Tinkler owns 21.4% of Whitehaven, after completing a merger of his previous coal company, Aston Resources, in April. Under that deal, Tinkler not only managed to merge Aston with the larger Whitehaven, but he also got Whitehaven to buy another Tinkler company called Boardwalk Resources.

Now Tinkler, who has recently revealed to be basing himself in Singapore (where tax rates are much lower than in Australia), is taking aim at the whole prize.

Whitehaven confirmed this morning that it has received “an indicative, non-binding proposal from Tinkler Group Pty Ltd (an entity controlled by Nathan Tinkler) relating to a possible privatisation of Whitehaven from a Tinkler Group consortium.”

“The proposal is highly conditional and incomplete and is not considered capable of being progressed at this time.”

However, Whitehaven has set a committee of directors (not including Tinkler’s board representatives, of course) to consider a bid that is a “less conditional and more complete proposal”.

Tinkler, who was valued by BRW in May at $915 million, would not be able to finance this deal alone, given Whitehaven has a market capitalisation of $3.9 billion and shareholders would expect some sort of premium.

Exactly who might be willing to fund the deal remains unclear. The Australian Financial Review reported today that Tinkler has already set up a relationship and loan agreement with Farallon Capital Partners.

The move – which is sure to involve a significant amount of debt – would represent the biggest corporate play in Tinkler’s relatively short career.

Until now, he has built a reputation as an asset trader rather than a builder of mining projects.

In 2006, he borrowed $1 million and raised another $30 million from investors to buy a coal deposit through his company Custom Mining.

A year later, Macarthur Coal bought Custom Mining for $275 million in cash and, in mid-2008, Tinkler sold out of Macarthur Coal for about $400 million.

He used this cash to buy the coal deposit on which Aston Resources was based. This company was floated in mid-2010, so had less than two years before Tinkler traded up again.