Tinkler in bold move to unload racing empire for $200 million
WHEN Nathan Tinkler began lavishing a fortune on racehorses he was unabashed in his ambition: he wanted to become the most powerful man in the sport.
But four years after starting the biggest spending spree in racing’s history – and having invested about $300 million – that ambition may go unrealised. BusinessDay can reveal that in June Mr Tinkler tried to raise $200 million by selling his entire racing and breeding empire that includes stud farms, private training centres, as well as hundreds of racehorses, broodmares and tens of stallions.
Mr Tinkler’s racing company, Patinack Farm, approached Sheikh Fahad Al Thani – the Qatari royal who owns last year’s Melbourne Cup winner, Dunaden. But the deal was knocked back, with one source familiar with the offer describing it as “wishful thinking on Tinkler’s behalf”.
His attempt to offload his racing and breeding interests – which BusinessDay last year calculated was costing him about $500,000 a week – will be keenly noted in financial circles.
Earlier this week, eyebrows were raised when Mr Tinkler – whose fortune was estimated by BRW at $915 million – failed to produce $28.4 million to fulfil an agreement to buy a 33 per cent stake in listed coal company Blackwood Corp.
That failure comes at a time when Tinkler – who has an unrivalled reputation as a deal maker after building his fortune on a $500,000 loan to buy a coalmine in which others saw no potential – attempts to borrow money to privatise the mining company Whitehaven, in which he holds 21 per cent of the stock. To do that deal he needs to raise about $1 billion from partners.
But Mr Tinkler’s Whitehaven stock has slumped recently.
Yesterday his shares were worth $802 million, down from $1.2 billion in April. There are also at least four outstanding loans totalling $US303 million drawn against those shares.
Despite being knocked back trying to offload Patinack to Sheikh Thani, he contacted Gerry Harvey to help him raise cash from his racing assets.
The Harvey Norman founder is a huge player in the racing industry and owns Magic Millions, one of Australia’s leading auction houses for horses.
Yesterday afternoon Magic Millions announced that it would sell about 350 of Patinack’s horses in a special reduction sale to be held on the Gold Coast in October.
But sources within the racing industry believe that Mr Harvey has given Mr Tinkler a cash sum in advance of the sale, thought to be in region of $20 million.
When asked about paying cash to Mr Tinkler, as an advance on money to be raised at the October auction, Mr Harvey told BusinessDay: “Any deal or business we do is a personal matter between him and me. I wouldn’t speak about that publicly.”
After dabbling in racehorse ownership, Mr Tinkler announced himself to the industry with the subtlety of sledgehammer. After spending tens of millions on future racehorses at the 2008 breeding sales, he went out and bought farms and training tracks. There was also a revolving door of employees, including advisers and trainers.
To suggestions he was trying to achieve too much too soon in the sport, Mr Tinkler said: “There are no experts in the [racing] industry.”
When asked about the Patinack offer, Sheikh Thani’s bloodstock adviser, David Redvers, said: “People often come to us with offers and we reject nearly all of them.”