Centennial backs Banpu takeover

Finance

Publishing Date: 05 Jul 2010 11:05am GMT
Author: Mining Journal

ASX-listed Centennial Coal has recommended a cash offer from Thailand’s Banpu plc, valuing the company at about A$2.5 billion (US$2.1 billion).

Centennial confirmed that Banpu has offered a A$6.20/share deal for the remaining 80% of the equity it does not already own in the company.

The offer represents a 40% premium on the July 2 closing price and a 55% premium to the May 5 closing price, when Banpu lifted its share in Centennial to 14.9%. Banpu increased its stake in the company to 19.9% two weeks ago.

Centennial said it had carefully considered the offer and unanimously recommended it to shareholders.

Chairman Ken Moss said: “The offer price of A$6.20/share, in cash, delivers compelling value to Centennial shareholders and represents an attractive premium to the recent Centennial share price.”

Centennial owns ten mines, all in New South Wales, and sells close to 35% of its coal to the export market.

Chief executive Bob Cameron said: “Centennial is strategically placed to take advantage of strong demand for thermal coal, with long term domestic contracts expiring in coming years.”

“We also expect to grow production as a result of our new operations at Airly and the Newstan Lochiel project. Banpu’s offer recognises the current profitability of Centennial and its upside.”