Australian producer Centennial Coal today recommended shareholders accept the A$6.20 ($5.20) a share bid from Thai coal group Banpu.
Banpu's bid values Centennial at A$2.5bn, giving it access to one of the largest suppliers of Australian coal and an exporter of thermal coal through the port of Newcastle. The acquisition will be financed by cash reserves and through new and existing credit lines, Banpu said.
Banpu already owns 19.9pc of Centennial, which estimates to have produced 15mn t of saleable coal in the financial year to 30 June 2010 with more than half sold to utilities in New South Wales. Centennial expects domestic sales to fall to about 5mn t/yr in the financial year 2014-15 with exports rising to close to 15mn t/yr. Centennial is strategically placed to take advantage of strong demand for thermal coal, with long-term domestic contracts expiring in coming years, said Centennial Coal chief executive Bob Cameron.
Banpu's bid is conditional on 50.1pc acceptance by Centennial shareholders, approval from Australia's Foreign Investment Review Board and the Bank of Thailand. Its bid comes as Australian thermal coal exports to Thailand are on the rise. Thailand imported 3.4mn t of thermal coal last year, up from 2.28mn t/yr in 2008.
Banpu's bid values Centennial at A$2.5bn, giving it access to one of the largest suppliers of Australian coal and an exporter of thermal coal through the port of Newcastle. The acquisition will be financed by cash reserves and through new and existing credit lines, Banpu said.
Banpu already owns 19.9pc of Centennial, which estimates to have produced 15mn t of saleable coal in the financial year to 30 June 2010 with more than half sold to utilities in New South Wales. Centennial expects domestic sales to fall to about 5mn t/yr in the financial year 2014-15 with exports rising to close to 15mn t/yr. Centennial is strategically placed to take advantage of strong demand for thermal coal, with long-term domestic contracts expiring in coming years, said Centennial Coal chief executive Bob Cameron.
Banpu's bid is conditional on 50.1pc acceptance by Centennial shareholders, approval from Australia's Foreign Investment Review Board and the Bank of Thailand. Its bid comes as Australian thermal coal exports to Thailand are on the rise. Thailand imported 3.4mn t of thermal coal last year, up from 2.28mn t/yr in 2008.
