Whitehaven Coal Ltd. (WHC.AU) moved Monday to wrap up its control of coal projects in eastern Australia with a A$142 million (US$144 million) offer for smaller Coalworks Ltd. (CWK.AU), following its recent A$2.3 billion takeover of Aston Resources Ltd.

Coalworks shareholders will be offered A$1 cash for each share, a 17% premium to the closing price Friday, Whitehaven said in a statement.

Whitehaven already owns a 17.3% stake in Coalworks after acquiring Aston and unlisted Boardwalk Resources, which is jointly exploring with Coalworks the latter's Ferndale coking and thermal coal project in New South Wales.

"The acquisition of Coalworks represents a logical next step...which will allow Whitehaven to consolidate its development and exploration portfolio," said Tony Haggarty, managing director of Whitehaven.

Whitehaven's move on Aston this year created Australia's biggest independent coal-only mining company, bulking up its resource base to better compete against giant diversified mining companies such as BHP Billiton Ltd. (BHP) and Xstrata PLC (XTA.LN). Dealmaking in Australia's coal sector has been hot in recent months, with Yanzhou Coal Mining Co. (YZC) seeking to buy Gloucester Coal Ltd. (GCL.AU) and U.S. producer Peabody Energy Corp. (BTU) last year acquiring Australia's Macarthur Coal Ltd. for A$4.9 billion.

Industry analysts had speculated Whitehaven would extend its reach with a bid for Coalworks. After Whitehaven launched its offer in December for Aston and Boardwalk, Coalworks appointed Pitt Capital Partners as an adviser.

Coalworks said in a statement it hasn't discussed the proposed bid with Whitehaven, and is advising its shareholders to take no action while its directors review the offer.

Coalworks last month raised A$17.4 million via a share placement at A$0.78 each, through which commodities trader Noble Group Ltd. (N21.SG) increased its stake to 9%.

Whitehaven's Haggarty said the takeover bid is at a significant premium to the placement price, and offers cash in exchange for the risk associated with funding and developing of Coalworks' assets. The Vickery South and Ferndale projects are capital intensive, and can be more efficiently development in combination with Whitehaven's assets, he said.

The Vickery South project is next to Whitehaven's Vickery coking and thermal coal development in New South Wales.

Coalworks also has a 33.4% stake in Orpheus Energy Ltd. (OEG.AU) that Whitehaven said it would seek to sell.

Whitehaven, which has plans to boost production to about 25 million metric tons a year by 2016 from 4.7 million in the last financial year, said its offer is conditional on confirmation that a corporate advisory arrangement between Coalworks and Noble can be ended without any termination fee and Coalworks not declaring any dividends.

Grant Samuel Corporate Finance and Goldman Sachs Australia are acting as financial advisers to Whitehaven.

-By Robb M. Stewart, Dow Jones Newswires; +61 3 9292 2094; robb.stewart@dowjones.com

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