An effort to stage a buyout of Whitehaven Coal has fallen apart.

Nathan Tinkler, an Australian coal magnate, has abandoned a $5.4 billion bid for the coal mining company, amid investor concern about Australia’s mining sector. Mr. Tinkler had offered 5.20 Australian dollars, or $5.29, a share for the company in July, at what was then a 50 percent premium.

Shares of Whitehaven dropped on Friday to close at 3.1 Australian dollars a share, 11 percent below Thursday’s closing price.

Whitehaven had opened its books to Mr. Tinkler on July 23, giving him until Thursday to gather the resources for a bid. According to Reuters, which cites an unidentified person familiar with the deal, the billionaire was unable to line up enough equity financing.

“The due diligence period expired yesterday and Whitehaven has now been advised by the Tinkler Group that a formal binding proposal of $5.20 cash per share will not be forthcoming,” Whitehaven said in a statement on Friday. “Accordingly, the data room has been closed and the due diligence process has now ended.”

Mr. Tinkler has a history with Whitehaven, having amassed a 20 percent stake in the company after it bought Aston Resources, a coal company of which he was chairman, and Boardwalk Resources, another mining company he backed. This summer, he tried to parlay that stake into a bid for the entire company.

In July, Mr. Tinkler’s bidding group said it had received support from roughly 48.3 percent of Whitehaven’s shares, according to the mining company.

The effort came as investors have soured on Australia’s mining sector, contributing to a fall in coal prices. Part of that concern stems from slowing economic growth in China, a major trading partner for Australia.

Article source: http://dealbook.nytimes.com/2012/08/24/australian-magnate-abandons-bid-for-whitehaven-coal/?partner=rss&emc=rss