Tinkler makes formal bid for Whitehaven

13 Jul 2012, 8:28 pm   -   Source: AAP

Nathan Tinkler's private company made a formal bid for Whitehaven Coal after the close of share market trading on Friday.

Billionaire coal magnate Nathan Tinkler has made a formal bid for Whitehaven Coal in which he hopes to take the miner under his private control.

The formal bid, made after the close of share market trading on Friday, is for $5.20 cash for each Whitehaven share.

This compares with Whitehaven's Friday closing price at $3.45, which is down eight cents on the day and near a three-year low.

Mr Tinkler is a 36-year-old former electrician from the New South Wales Hunter Valley and his Tinkler Group privately held company already owns 21.4 per cent of Whitehaven.

Whitehaven is a New South Wales-based coal producer with operations and development projects in the Gunnedah Basin and Hunter Valley as well as Queensland.

Whitehaven said that it had received an indicative, non-bidding proposal from Tinkler Group to take Whitehaven private by acquiring all of its shares through a scheme of arrangement.

Tinkler Group has advised that 48.3 per cent of Whitehaven shareholders have expressed their interest in rolling their shares into the Tinkler Group bid vehicle, subject to the satisfactory completion of due diligence and required documentation.

Tinkler Group's proposal is supported by conditional letters of support from senior lenders UBS, JP Morgan and Barclays and that due diligence will now take place over a four-week period.

Whitehaven has agreed not to solicit other proposals during this period.

An independent board committee (IBC) of directors not associated with Tinkler Group's shareholding was formed by Whitehaven after it received a earlier Tinkler proposal on Friday.

Whitehaven said this earlier proposal was "not being capable of being processed at that time" before a fresh offer was made.

"The IBC has concluded that it is in the best interests of Whitehaven shareholders to enable Tinker Group to conduct due diligence in order to further develop its proposal," Whitehaven said in a statement to the Australian Securities Exchange.

"In reaching this decision, the IBC has taken into account the premium represented by the proposed $5.20 per share offer price to recent Whitehaven share prices.

"However, IBC notes that the proposal is still conditional and subject to a committed funding package."

Mr Tinkler's stake in Whitehaven was acquired when the miner took over his Aston Resources coal company and Boardwalk Resources coal exploration firm for about $2.7 billion earlier this year.

A full bid for Whitehaven is expected to value the coal miner's entire share capital at about $5.20 billion.

However, it comes at a time when coal prices for power generation have fallen about 20 per cent this year to about $US90 a tonne because of the weak outlook for the global economy.

Whitehaven itself has previously been a takeover target but failed to reach a deal after receiving several proposals in 2011.

Previous unsuccessful bidders have included US giant Peabody Energy, which instead took over Macarthur Coal and China's Yanzhou Coal, which bought Gloucester Coal.

Whitehaven said last month that it had received an "incomplete" offer from Tinkler Group, which at the time boosted its share price by around 10 per cent.

  • Follow us: 
  • Follow us on Facebook
  • Follow us on Twitter
  • Follow us on Youtube