Austral gives thumbs up to Centennial merger

AUSTRAL Coal directors yesterday gave the go-ahead to Centennial Coal’s $300 million scrip offer, with the merger likely to proceed within the next two months.

Angie Tomlinson

"The merger has been endorsed by the Austral board in the absence of a higher offer and is expected to proceed over the next two months," Austral said.

Centennial Coal originally made the offer one week ago, offering Austral shareholders 10 Centennial shares for every 37 Austral shares, equating to an offer of $1.10 per Austral share.

The merger will lift Centennial's exposure to the lucrative coking coal export market.

Austral reported a net loss of $30.26 million for the year ending December 31, 2004, blaming its loss on operational problems since the new longwall was installed in April last year.