Australian coal miner Macarthur Coal has agreed to postpone its extraordinary general meeting originally scheduled for next Monday to vote on Macarthur’s takover of another Australian coal miner, Gloucester Coal Ltd. The delay is the result of a sweetened offer from Peabody Energy Corp. (BTU) of AUS$4.07 billion for Macarthur, provided Macarthur doesn’t acquire Gloucester.

Macarthur has spurned two earlier offers from Peabody as insufficient without so much as talking to Peabody. Perhaps the difference is that two of Macarthur’s shareholders, South Korean steelmaker POSCO (PKX) and Indian steel giant ArcelorMittal NY (MT) have indicated that they are not opposed to Peabody’s offer. Macarthur’s largest shareholder, Germany’s CITIC Resources, which holds 22.4% of the coal miner’s stockk, has not yet weighed in on Peabody’s proposal. POSCO and ArcelorMittal together own 25% of Macarthur.

Peabody’s latest offer is an all-cash deal at a per share price of AUS$16. The coal miner’s previous offer of AUS$14/share was topped by an offer from another Australian coal mining firm, New Hope Corporation, to buy Macarthur for AUS$14.50/share, either in New Hope shares or in cash, with the cash offer capped at $950 million. New Hope said this morning that it has no plans to raise its offer at this time.

Macarthur’s offer to buy competitor Gloucester complicates things further. In December, Macarthur offered about $670 million for the mining company. Hong Kong financial firm Noble Group owns 87.7% of Gloucester, and made a counter offer of $117 million for the portion of Gloucester it didn’t already own. That offer placed a value of $943 million on Gloucester.

At stake is a rare type of high-carbon coal mined by Macarthur. It’s called PCI coal, or pulverized coal injection coal. It is cheaper than coking coal (essential in steelmaking), and less of the stuff is required in a steelmaker’s blast furnaces. Macarthur supplies 44% of the world’s total PCI coal.

Gloucester mines both metallurgical (coking) and thermal coal, but is ramping up its production of coking coal in response to higher demand. The company’s five major customers are Japanese steelmakers, all of which recently agreed to a doubling of coking coal prices and contract terms have been shortened from the standard one-year deal to quarterly deals, similar to the new contract scheme in the iron ore business.

Peabody’s shares are down about 2% in early trading this morning. But the company has shown that it won’t be denied, at least as long as the bidding doesn’t get out of control. Macarthur is a good fit for Peabody, and both companies know it.

Tell us what you think here.

Related Articles:

• China and U.S. Race for Australia’s Coal (BTU, YZC, CEO)
• Apache Deal With Devon Adds Another Deepwater Stake

• Energy Stocks MIR and RRI Join to Keep the Lights On