RICH PICKINGS: Big spender
After building up a sizeable fortune from his dealings with Macarthur Coal, Nathan Tinkler has embarked on a horseflesh spending spree that has to be seen to be believed.
It's been another big week for Nathan Tinkler. The 31-year-old former electrician, who owns just over 10 per cent of the shares of coal miner Macarthur Coal, has seen the value of his stake increase by $73.8 million to $367 million in just four days. The surge in Macarthur shares came after the company's major shareholder, Ken Talbot, announced he was selling his stake. That sale is almost certain to lead to a takeover offer for Macarthur, with analysts putting the price at more than $3 billion.
Tinkler might be making a pile, but he's spending plenty too. When Business Spectator first introduced readers to Tinkler, it was after his $5 million spending spree at Karaka thoroughbred yearling sales in New Zealand. Since then, Tinkler's stud Patinack Farm has splurged more than $70 million on land and horses, including a $19 million bender at the Magic Millions sale on the Gold Coast, where he picked up 59 yearlings in a buying blitz. There was even a rumour earlier this week that Tinkler had purchased a share of the Magic Millions sales business, which is owned by billionaire Gerry Harvey, advertising veteran John Singleton and former banker Rob Ferguson, but Magic Millions managing director David Chester has denied the story. Still, Chester is thrilled to have Tinkler at his sales. "It's great for the industry. A lot of out big owners are getting a bit long in the tooth and we need a young passionate guy like Nathan in the industry.”
At this week's William Ingliss Easter yearling sale in Sydney, Tinkler has been spending up big again. While tracking Tinkler's purchases at these sales has been made harder by the fact he has not been buying under his own name (many of his purchases have been made by his trainer Anthony Cummings) it is clear that the spending hasn't stopped. He was responsible for the biggest buy of the sale – a full brother to former champion three-year-old Alinghi, which fetched a whopping $2.2 million.
Tinkler grew up in the Hunter Valley in Newcastle, which is famous for two things – coal and thoroughbreds. He made his fortune through the former, when in early 2006 his company Custom Mining bought the Middlemount coal deposit in central Queensland for $15 million. Six months later, Custom went ahead with its plans for a mine at Middlemount and commenced the project in August 2007.
But in December 2007, Queensland coal independent Macarthur Coal announced it had acquired Custom Mining and its 70 per cent stake in the Middlemount project for $275 million - $65 million in cash, $200 million of Macarthur Coal shares and another $10 million of shares in March 2009, subject to the satisfaction of certain conditions.
After selling his coal business, Tinkler started amassing his racing empire. Racing industry figures are watching Tinkler with a mix of enthusiasm, amazement and cynicism. While the industry always welcomes a new horse owner with deep pockets, some commentators have been quick to point out that business magnates who have tried to buy their way to the top of the sport have usually failed.
Indeed, the most recent example is Peter Rowsthorn, father of Asciano chief Mark Rowsthorn and one of the driving forces behind the expansion of logistics company Toll Holdings. Peter Rowsthorn has spent tens of millions of dollars in the past three years establishing a state-of the-art training and breeding facility in regional Victoria called Wadham Park. So far, Rowsthorn has seen little return for his heavy investment, with his horses yet to win a big race.
Still, the cynics should remember the recent $450 million purchase of the Ingham family's racing and breeding operation Woodland Stud by international thoroughbred company Darley, which is backed by the Saudi royal family. The Inghams built their stud up over more than 40 years, which proves it is possible to create valuable horse racing business if you have the necessary patience and resources.
Away from the race track, Tinkler will play an important role in deciding who wins the battle for Macarthur Coal. No doubt he will be holding out for the biggest price possible – feeding that huge team of horses won't be cheap.
Tinkler might be making a pile, but he's spending plenty too. When Business Spectator first introduced readers to Tinkler, it was after his $5 million spending spree at Karaka thoroughbred yearling sales in New Zealand. Since then, Tinkler's stud Patinack Farm has splurged more than $70 million on land and horses, including a $19 million bender at the Magic Millions sale on the Gold Coast, where he picked up 59 yearlings in a buying blitz. There was even a rumour earlier this week that Tinkler had purchased a share of the Magic Millions sales business, which is owned by billionaire Gerry Harvey, advertising veteran John Singleton and former banker Rob Ferguson, but Magic Millions managing director David Chester has denied the story. Still, Chester is thrilled to have Tinkler at his sales. "It's great for the industry. A lot of out big owners are getting a bit long in the tooth and we need a young passionate guy like Nathan in the industry.”
At this week's William Ingliss Easter yearling sale in Sydney, Tinkler has been spending up big again. While tracking Tinkler's purchases at these sales has been made harder by the fact he has not been buying under his own name (many of his purchases have been made by his trainer Anthony Cummings) it is clear that the spending hasn't stopped. He was responsible for the biggest buy of the sale – a full brother to former champion three-year-old Alinghi, which fetched a whopping $2.2 million.
Tinkler grew up in the Hunter Valley in Newcastle, which is famous for two things – coal and thoroughbreds. He made his fortune through the former, when in early 2006 his company Custom Mining bought the Middlemount coal deposit in central Queensland for $15 million. Six months later, Custom went ahead with its plans for a mine at Middlemount and commenced the project in August 2007.
But in December 2007, Queensland coal independent Macarthur Coal announced it had acquired Custom Mining and its 70 per cent stake in the Middlemount project for $275 million - $65 million in cash, $200 million of Macarthur Coal shares and another $10 million of shares in March 2009, subject to the satisfaction of certain conditions.
After selling his coal business, Tinkler started amassing his racing empire. Racing industry figures are watching Tinkler with a mix of enthusiasm, amazement and cynicism. While the industry always welcomes a new horse owner with deep pockets, some commentators have been quick to point out that business magnates who have tried to buy their way to the top of the sport have usually failed.
Indeed, the most recent example is Peter Rowsthorn, father of Asciano chief Mark Rowsthorn and one of the driving forces behind the expansion of logistics company Toll Holdings. Peter Rowsthorn has spent tens of millions of dollars in the past three years establishing a state-of the-art training and breeding facility in regional Victoria called Wadham Park. So far, Rowsthorn has seen little return for his heavy investment, with his horses yet to win a big race.
Still, the cynics should remember the recent $450 million purchase of the Ingham family's racing and breeding operation Woodland Stud by international thoroughbred company Darley, which is backed by the Saudi royal family. The Inghams built their stud up over more than 40 years, which proves it is possible to create valuable horse racing business if you have the necessary patience and resources.
Away from the race track, Tinkler will play an important role in deciding who wins the battle for Macarthur Coal. No doubt he will be holding out for the biggest price possible – feeding that huge team of horses won't be cheap.
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