Whitehaven Coal (ASX: WHC) has seen its share price rocket up 18.26% to A$4.07 since trading resumed this morning on the back of mining billionaire Nathan Tinkler’s A$5.25 billion takeover bid.
The A$5.20 offer, which represents a 50.7% premium over WHC’s closing price of A$3.45 on Friday, was made via the Tinkler Group-led bid vehicle, Bidco, and has the conditional support of UBS,
JP Morgan and Barclays, a major boost to confidence in a possible transaction.
Tinkler can already count on the support of shareholders holding 48.3% of Whitehaven’s shares and has the company’s independent board committee advising shareholders to take the bid seriously.
As a result, the committee has concluded it is in the company’s interests to allow Tinkler Group to conduct due diligence, a process which is expected to take about four weeks to complete.
This move is a further sign that the bid has the right backing to succeed.
The offer comes as Whitehaven’s shares hit a near three-year low on Friday leading some commentators to say that the smartest acquisitions have been made at similar points in the trading cycle.
Despite this, some analysts expected the company to continue trading at a discount to the offer price until the proposal becomes firmer.
Tinkler’s non-binding offer is also seen by some as an attempt to buy some time to find additional partners to secure a takeover or find new equity to restructure Whitehaven’s shareholder base.
Whitehaven’s chairman Mark Vaile and its founder and managing director Tony Haggarty, both of whom have now committed to supporting the takeover, are now seeking the views of the remaining shareholders.
These include major Australian and overseas institutional shareholders.
Whitehaven’s operations are underpinned by its Narrabri underground coal mine and its four existing open cut mines, all located in the Gunnedah Basin, New South Wales.
Further upside comes from the Maules Creek and Vickery Projects that are currently in the approvals phase.
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