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 commencing the biggest spending spree in racing’s history, and having invested about $300million, that ambition may go unrealised.
In June Mr Tinkler tried to raise $200million by selling his entire racing and breeding empire, which includes stud farms, private training centres, as well as more than 1000 racehorses, broodmares and 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”.
“Even if the Sheikh wanted to take on such a huge number of horses, $200million was over the top. Tinkler may own hundreds of horses, but there isn’t a lot of quality,’’ the source said.
His attempt to offload his racing and breeding interests, which the Sydney Morning Herald 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 $915million, failed to produce $28.4million in cash to fulfil an agreement to buy a 33per cent stake in listed coal company Blackwood Corp.
That failure comes at a time when Mr Tinkler, who has an unrivalled reputation as a deal maker after building his fortune on the back of a $500,000 loan to buy a coalmine in which others saw no potential, tries to borrow money to privatise the mining company Whitehaven, in which he holds 21per cent of the stock. To do that deal, with a total value of $5.3billion, he needs to raise about $1billion from partners.
But Mr Tinkler’s Whitehaven stock has slumped recently. His shares were worth $802million yesterday, down from $1.2billion in April. There are also at least four outstanding loans totalling $289million drawn against those shares.
Despite being knocked back trying to offload Patinack to Sheikh Fahad, 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 said it would sell about 350 of Patinack’s horses in a special reduction sale to be held in 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, suggested to be in region of $20million.
When asked about paying cash to Mr Tinkler, as an advance on money to be raised at the October auction, Mr Harvey said: “Any deal or business we do is a personal matter between him and me. I wouldn’t speak about that publicly”.
Those in the racing industry will note the irony that Mr Tinkler tried to offload his racing concern to Sheikh Fahad. Like Mr Tinkler, Sheikh Fahad is a relative newcomer to the sport but the two men have sought out success in very different ways.
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 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.”
Sheik Fahad’s approach, however, has been somewhat more low key. Rather than buying untried yearlings for premium prices, he concentrated on buying relatively inexpensive horses from other owners.
One of his first buys, for $40,000, was a colt called Makfi. Within months of owning the horse it won the 2000 Guineas, one of Britain’s most prestigious races and has since been retired to stud where it is earning millions each year.
Another Sheikh Fahad purchase, for about $100,000, was Dunaden. Since racing in the Sheikh’s silks, the six-year-old has won about $5million in prizemoney, including the Melbourne Cup.
When asked about the Patinack offer, Sheikh Fahad’s bloodstock adviser David Redvers said: “People often come to us with offers and we reject nearly all of them.”
A spokesman for Mr Tinkler failed to respond to questions last night. SMH