Miner Whitehaven Coal's shares shot up 18 per cent on Monday in response to billionaire Nathan Tinkler's high-premium takeover offer.
The 36-year-old Mr Tinkler made a $5.2 billion, $5.20 per share, cash bid after the market closed on Friday.
That represents a hefty 50 per cent premium to Friday's closing price of $3.45.
In the first day of trading since the offer, Whitehaven shares leapt 62 cents to close at $4.07 on Monday, still more than 25 per cent below the bid price.
The share price bounce has raised speculation the indicative and non-binding bid might be reduced.
Mr Tinkler declined requests to be interviewed but his company, the Tinkler Group, said in a statement that it had funding support and at least 48.3 per cent of shareholders agreeing to be part of the bid.
The move surprised analysts both in terms of the high-priced offer at a time of weakness in coal prices and the funding and shareholder support.
Patersons Securities analyst Andrew Harrington said he was cynical when the bid was revealed last month, because Mr Tinkler would be buying back assets he had sold this year.
His current 21 per cent stake in Whitehaven was acquired when the miner took over his Aston Resources coal company and Boardwalk Resources for about $2.7 billion.
"I still think it looks strange but it looks like the deal has got across the line from the bankers point of view," he told AAP.
"At some level he's got the bankers comfortable but I still think he's paying a pretty full price."
Senior lenders UBS, JP Morgan and Barclays have all provided conditional support.
They are all foreign banks and could access cheaper funding for Mr Tinkler, Mr Harrington said.
The shareholder support implies the backing of Whitehaven's major investors, including ACMI and First Reserve.
That makes life difficult for a potential competing bid and reduces the $5.2 billion cost for Mr Tinkler by about half.
ACMI president Hans Mende quit Whitehaven's board earlier this month.
Their interest in rolling in to the bid was a surprise, said Morningstar equities analyst Gareth James, considering they reduced their stake less than 18 months ago.
"Hans Mende came out and made comments, to the effect that the coal market was overvalued and that gave me the indication they were sellers and would be sellers into Tinkler's bid which would make it difficult," he said.
"Tinkler seems to have actually said to them, `why don't you roll into this bid and be part of it'."
Whitehaven has coking and thermal coal projects in NSW and Queensland.
Its June quarterly production report shows a 24 per cent drop in coal sales to 1.43 million tonnes from the same period last year.
Saleable coal production fell six per cent to 1.39 million tonnes.
Whitehaven expects the thermal coal export market to remain soft for the next two quarters, but believes metallurgical coal sales will jump to 2.2 million tonnes in the new financial year.
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