Centennial Coal is urging its shareholders to consent to the cash takeover offer worth $6.20 per share from Banpu Public Co Ltd, a company based in Thailand.

The directors of Centennial unanimously backed the deal and promoted it to shareholders in the lack of a better proposal, Centennial said in a statement.

Shares of Centennial Coal were $4.42 on closing, Friday.

Banpu Public Co Ltd, a Thai-owned power generation and coal mining company, is already the largest shareholder of Centennial at the moment, with stakes amounting to 19.9 per cent.

Centennial Coal says it has started talks of bid implementation agreement with Banpu, for the latter to conduct a takeover off the market for all the other shares it has yet to control or own.

The Banpu offer worth $6.20 per share values the diluted equity in Centennial in full at around $2.5 billion.

"The offer price of $6.20 cash per share delivers compelling value to Centennial shareholders and represents an attractive premium to the recent Centennial share price," Ken Moss, chairman of Centennial Coal said.

Bob Cameron, CEO and managing director or Centennial Coal, also said that Banpu plans to maintain present employees and operations.

"Centennial is strategically placed to take advantage of strong demand for thermal coal, with long term domestic contracts expiring in coming years," Mr. Cameron said.

"We also expect to grow production as a result of our new operations at Airly and the Newstan Lochiel Project.

"Banpu's offer recognises both the current profitability of Centennial and its upside."

Centennial will also release an independent expert's report to verify whether the bid is reasonable and fair.