A trading halt on Blackwood Corp (ASX:BWD) shares has cast further doubt upon Australian mining magnate Nathan Tinkler’s audacious AUD$5.3 billion privatization bid for Whitehaven Coal (ASX:WHC).
According to the Australian coal junior Blackwood called for the trading halt on Monday Eastern Standard Australian time in anticipation of a AUD$28.4 million cash injection from Tinkler, who first offered to accept a share placement in May which would leave Tinkler’s Mulsanne Resources a one-third shareholder.
Despite Blackwood shareholders approving the placement several weeks ago Tinkler has failed to make payment as promptly as expected, lending succour to market skepticism about his ability to pull off a brazen AUD$5 billion privatization bid for Whitehaven Coal.
On July 13, the day following approval of the Blackwood placement by an extraordinary general meeting, Whitehaven Coal announced that it had received an indicative and non-binding privatization bid from Tinkler Group which priced the 73% of Whitehaven which Tinkler doesn’t currently hold at AUD$5.3 billion.
The bid from Tinkler is debt-funded, and requires the support of a further 17% of Whitehaven shareholders or else necessitate the raising of further equity by Tinkler to buy them out.
According to the Sydney Morning Herald the market put a low probability on Tinkler’s privatization proceeding, and Whitehaven shares swiftly sank beneath the offer price after an initial leap. Shares slumped 3% to AUD$3.60 prior to some mitigation of losses in recent trading.
Today’s trading halt can only contribute further to any adverse speculation on Tinkler’s ability to pull off the Whitehaven deal.
