Peabody Raises Bid for Macarthur Coal

Macarthur's board said Tuesday it would meet to consider the offer, but advised shareholders to take no action until it makes a recommendation.
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ST. LOUIS (

TheStreet

) --

Peabody Energy

(BTU) - Get Report

, the largest coal miner in the U.S., increased its offer for Australia's

Macarthur Coal

by 1 Australian dollar a share for a total bid of A$3.56 billion ($3.27 billion).

Peabody's bid of A$14 a share comes after Macarthur last week rejected Peabody's A$13 bid as too low.

Macarthur's board said Tuesday it would meet to consider the offer, but advised shareholders to take no action until it makes a recommendation.

A key part of the bid requires that Macarthur drop its own bid to buy

Gloucester Coal

, a smaller Australian rival. Macarthur's bid for Gloucester was on the path to being accepted and would create a company worth A$3.4 billion.

In response to Peabody's new offer, Gloucester's majority shareholder, Noble Group of Hong Kong, offered to take over the smaller Australian company if the Macarthur bid didn't proceed.

Noble, which owns nearly 90% of Gloucester, said Tuesday it offered A$12.60 a share -- or A$127 million -- for the rest of the company. But Noble said it wanted the deal with Macarthur to go ahead as planned and called Peabody "opportunistic and crafty" for its unsolicited bid.

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