Centennial Coal (CEY) is a coal mining and marketing company, which supplies thermal and coking coal to domestic and offshore markets.
Being involved the lucrative coal market, CEY is one of the market’s hot stocks.
Highlighting this, CEY received a $2.5 billion takeover offer from Thailand’s Banpu. The bid is pitched at $6.20 cash per share, representing a 40% premium to Friday’s closing price of $4.42.
Banpu, which already holds a 19.9% stake in CEY, made its move in a likely response to the revised resources rent tax having a much smaller impact on CEY than originally estimated.
The deal was immediately recommended by CEY to its shareholders.
The offer now heads to the Foreign Investment Review Board for approval, with the main sticking point being whether CEY will continue to supply the domestic power-generation market.
CEY was one of the key shares to buy in the Australian share market, surging over 30% on the day of the takeover announcement.