It has probably been the most widely expected bid in the market, but that didn't stop Thai-based group, Banpu, producing a surprise in its offer for Centennial Coal, the medium-sized NSW producer, yesterday.

That surprise was the $6.20 a share price in the proposed offer.

The deal values Centennial at $2.5 billion and, according to Bloomberg, it's Thailand's biggest single offshore acquisition.

Centennial shares had closed at $4.42 on Friday (having reacted slightly to the ending of the brawl over the resource rent tax), so the offer price is a heady 40% premium to that, and 55% before Banpu started buying shares in early May.

Banpu has a 19.9% stake in Centennial, paying up to $5 a share as it built its stake from the first reported 14.9% stake, to 19.9%.

Now it has delivered what it sees as a knockout offer.

Centennial shares jumped 32% yesterday to end at $5.83 (a rise of $1.41 on the day).

With such a rich price, it's no wonder Centennial Coal is recommending shareholders accept the all cash offer, subject to the usual proviso of there being no other bids.

Centennial said in its statement that it had entered a bid implementation agreement for Banpu to make an off-market takeover bid for all shares it does not already own or control.

"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," Centennial Chairman, Ken Moss, said.

Managing director and chief executive, Bob Cameron, said in a statement that Banpu intended to maintain 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 said it will provide an independent expert's report to determine whether the offer is fair and reasonable.