Coal miner Centennial Coal Company Ltd
(ASX:CEY) has recommended that shareholders accept a takeover offer from Thailand’s Banpu Company in the absence of a superior one.
The Thai company is Centennial’s largest shareholder already holding a 19.9% stake in the company.
Banpu is offering $6.20 a share for all the shares it does not already own in Centennial, valuing the company at $2.5 billion.
Chairman Ken Moss says the offer price of $6.20 a share delivers compelling value to Centennial shareholders and represents an attractive premium to the recent Centennial share price.
CEO Bob Cameron says Centennial Coal is strategically placed to take advantage of strong demand for thermal coal, with long term domestic contracts expiring in coming years.
Mr Cameron says the company also expects to grow production of its new operations at Airly and the Newstan Lochiel project.
Centennial says the offer from Banpu recognises both the current profitability of Centennial and its upside.
The company says Banpu has indicated that it will maintain current operations and employees.
Centennial says it intends to provide an independent expert’s report to determine whether the offer is fair and reasonable.
Centennial Coal booked a profit of $71.2 million for the year to June 30, 2009.
