Centennial shares soaring
Shares in Centennial Coal have opened 34 per cent stronger after the company agreed to a $2.5 billion acquisition offer from Thailand's Banpu Public Co Ltd.
After closing at $4.42 on Friday, Centennial began at $5.92 per share today and last moved up 33 per cent at $5.88. With the share value below Banpu's $6.20 per share bid, the trading shows investors do not expect a higher offer to surface.
In a company statement, Centennial's directors unanimously backed the deal to shareholders in the absence of a better proposal.
Owning a 19.9 per cent, Thai coal mining and power generation firm Banpu Public Co Ltd already is Centennial's largest investor.
The Sydney-based company has entered a bid implementation agreement for Banpu to make an off-market acquisition bid for all shares it does not yet control.
The proposed price of $6.20 per share sets the value of the fully diluted equity in Centennial at about $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," said Centennial chairman Ken Moss.
Managing director and chief executive Bob Cameron said Banpu planned to keep current operations and employees.
"Centennial is strategically placed to take advantage of strong demand for thermal coal, with long term domestic contracts expiring in coming years," he 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 furnish an independent expert's report to check if the offer is fair and reasonable.