Mr Tinkler already owns more than 21 per cent of Whitehaven after selling his Aston Resources and Boardwalk Resources to the group for $2.25 billion earlier this year.

Yesterday Mr Tinkler unveiled a bold plan to privatise Whitehaven, which has a market value of $4.2 billion.

The proposal was rejected by the board as "incomplete and highly conditional".

Whitehaven is the country's largest coal-only producer, with output forecast to almost triple from 5.8 million tonnes this year to 14.7 million tonnes by 2016.

Any privatisation proposal for Whitehaven would need to be approved by the company's other major shareholders, such as ACMI and First Reserve.

ut a bid is not a total surprise as prior to the takeover of Aston and Boardwalk Resources, the Whitehaven board had put itself up for sale.

The process was abandoned after being unable to attract the right price.

Whitehaven CEO Tony Haggarty said if a less conditional and more complete proposal arose, the directors had taken steps to ensure the independence of Whitehaven's response.

A spokesman for Mr Tinkler, who ranks as one of the country's richest people under the age of 40, would not comment on further details or to reveal possible financial backers.

Mr Tinkler recently moved to Singapore and analysts said he may line up a consortium of Asian investors, including Japan's Idemitsu and other Japanese and Korean companies already active in NSW's coal industry.

Whitehaven shares soared as high as $4.36 on news of the potential deal yesterday, before retreating to finish 18c up at $4.18.

Analysts said Mr Tinkler may have to pay a premium of more than 30 per cent to secure control of Whitehaven.

Wilson HTM analyst Andrew Pedler, who has a $7.21 price tag on the stock, said a counter-offer was possible and the company was "significantly undervalued".