The reason August 13 is important for Tinkler is that it marks the end of the four-week period granted by the board of Whitehaven on July 13 for his syndicate to conduct due diligence analysis of the company.

Whitehaven could always grant more time for Tinkler to finalise his proposed $5.20 a share bid, but it could also take one of three other steps:

• Demand that Tinkler “put up, or shut up”
• Invite other bids, or
• Let the issue lapse and pretend it never happened.

If The Hog was a betting man he would put his money on any takeover offer for Whitehaven priced at the $5.20 proposed by Tinkler disappearing as fast as the profitability of the Australian coal industry as it battles low prices and the high dollar.

The problem for everyone involved, including Tinkler, his banks, and even the Whitehaven board, is that nothing has moved in favour of the proposed bid since it first surfaced in mid-June, and went semi-formal on July 13. Not much is likely to change by Monday either.

Investors can smell the problems, and through the Whitehaven share price at less than $4 they are sending a powerful signal that they do not believe a $5.20 bid will surface.

Tinkler, however, is as confident as ever, telling national media outlets this week that he stands by his $5.25 billion privatisation proposal, while also inferring that the stock market was mispricing Whitehaven.

He told Bloomberg “the market is valuing assets very differently to how long-term investors value them”

“The market is probably valuing things at half what they’re really worth, in particular when you have a suite of assets that are in development,” he said.

Tinkler could be right. Whitehaven could be worth a lot more than the $3.8 billion value implied in the company’s latest share price of $3.80.

But, that $1.40 (or $1.4 billion) gap between the price being put on Whitehaven by the market and the price Tinkler says is prepared to offer will be sending a shiver down the spines of the bankers who are being asked to provide the cash for the takeover bid.

It is impossible to look inside the collective mind of the market, or members of Tinkler’s banking syndicate. It is possible, however, to consider the same evidence in front of them, and that evidence includes these three telling points: low coal prices, high currency, and high taxes.

Anyone who considers those three points will see that all are beyond the control of Whitehaven, any other coal miner, or any banker being asked to fund a coal company takeover bid.

Thermal coal prices have been driven down by a combination of Europe’s financial crisis, which is dampening demand for electricity, and a glut of cheap natural gas in the US, which is forcing coal mined in that country onto the world market.

Even metallurgical coal used for steel-making is heading into a period of lower prices as steel production contracts in China.

Bankers, who are having enough problems of their own, will be looking at the coal price and asking whether the stock market is correctly pricing Whitehaven on a future earnings basis or whether Tinkler’s enthusiasm will flow into the global coal market.

The money men will also be looking at the Australian dollar, which has been on a one-way upward ride since the Tinkler bid surfaced in mid-June.

Back then the Aussie dollar was trading at US99c. It rose to $US1.01 on July 13 when the Whitehaven board granted Tinkler his four-week due diligence window, and then up again to about $US1.05.

Adding to the problem of low coal prices and a high exchange rate is the question of Australia’s “super-tax” on iron ore and coal profits.

The only good thing that can be said about the tax is that it only applies if a coal mining company is making a profit, and that is not guaranteed after factoring in coal prices and currency.

It is the triple-whammy of price, currency and tax that would have influenced the Whitehaven board to add this telling sentence to its July 13 due diligence deal with Tinkler and his syndicate: “the proposal is still conditional and subject to a committed funding package”

Monday is the time for Tinkler to reveal his funding package, or not.