Banpu buys Centennial

10:08, July 06, 2010      

Email | Print | Subscribe | Comments | Forum 

Banpu Pcl, Thailand's biggest coal producer, agreed to buy the rest of Centennial Coal Co for A$2 billion ($1.7 billion) in the nation's biggest overseas takeover to secure supplies as prices climb.

Banpu will pay A$6.20 cash a share, 40 percent more than Centennial's closing price on July 2, for the 80 percent of the producer it doesn't own, the Sydney-based company said. Centennial directors recommended the bid.

The deal gives Bangkok-based Banpu control of 10 mines in Australia, the world's largest coal exporter, and power station customers in Japan and Europe. The Australian government's decision last week to cut a planned new tax on mine profits may trigger more takeovers of resource companies.

The compromise has "unleashed some of the deals that were in the pipeline", said Mike Elliott, Sydney-based global mining and metals sector leader for Ernst & Young LLP. "The takeover for Centennial Coal has certainly come about with the removal of some of that uncertainty."

Thermal coal prices may rise to $110 a ton next year, from $98 this year, with demand driven by China and India, according to Deutsche Bank AG.

Centennial surged 32 percent to A$5.83 in Sydney trading for the biggest gain since the shares started trading on Aug 5, 1994. Banpu, which began building its stake in Centennial after the proposed profit tax was announced on May 2, ended the morning session 2.3 percent higher at 616 baht.

"Banpu is excited to have exposure to the Australian coal sector and believes that an acquisition of Centennial would be the initial step in driving further consolidation," Chief Executive Officer Chanin Vongkusolkit said in a separate statement.

A total of $39.2 billion has been offered for Australian-based companies in announced deals in 2010, according to data compiled by Bloomberg. Singapore-based Wilmar International Ltd agreed on Monday to pay A$1.75 billion for CSR Ltd's Australian sugar unit.

The bid also boosted shares of rival Australian producers. Whitehaven Coal Ltd gained 5.1 percent to settle at A$4.75, the highest close since June 30. Macarthur Coal Ltd rose 5.2 percent to A$12.75, the highest since June 21. The benchmark S&P/ASX 200 Index dropped 0.4 percent.

Banpu's offer is priced at 11.16 times Centennial's earnings before interest, tax, depreciation and amortization.

That's almost double the 6.77 times EBITDA that Yanzhou Coal Mining Co paid when it won Australian government approval for its A$3.5 billion takeover of Felix Resources Ltd last year.

Source:China Daily

(Editor:黄蓓蓓)

  • Do you have anything to say?

双语词典
dictionary

  
Special Coverage
  • Premier Wen Jiabao visits Hungary, Britain, Germany
  • From drought to floods
Major headlines
Editor's Pick
  • On Sept. 28, tourists travel around the Mingshashan Scenic Area in Dunhuang, Gansu province by camel. With the National Day vacation right around the corner, more and more tourists from home and abroad are going to Dunhuang. Riding on a camel, they travel in the desert to enjoy the cities rare form of natural scenery. (Xinhua/Zhang Weixian)
  • Chinese forest armed forces work together with forest firefighters on Sept. 28. (Xinhua/Chai Liren)
  • Photo taken on Sept. 29, 2011 shows strong wind blows trees in Sanya, south China's Hainan Province. Typhoon Nesat heads towards south China and is moving at an average wind speed of 20 km per hour toward the west coast of China's Guangdong Province. (Xinhua/Hou Jiansen)
  • A fallen tree is seen on a road in Qionghai, south China's Hainan Province, Sept. 29, 2011. Typhoon Nesat was predicted to land in Hainan later Thursday, bringing heavy rainfalls to the island. (Xinhua/Meng Zhongde)
  • Arash Kamalvand (L) of Iran spikes the ball during the semifinal against South Korea at the 16th Asian Men's Volleyball Championship in Tehran, Iran, Sept. 28, 2011. Iran won 3-1 to advance to the final. (Xinhua/Ahmad Halabisaz)
  • A man visits "Thy Word Is Truth, the Bible Ministry Exhibition of the Protestant Church in China", during its opening at Mount Vernon Place United Methodist Church in Washington DC, capital of the United States, Sept. 28, 2011. Through the Bible's various Chinese versions, ancient or modern, as well as pictures, paintings, calligraphy, art works and historical documents, the exhibition was expected to give an overall understanding of how Bible was brought into China, how it was translated, published, distributed and loved. (Xinhua/Zhang Jun)
Hot Forum Discussion