Peabody has raised its proposed takeover offer for Macarthur Coal to $3.8bn at $14.8 a share, driving Macarthur's shareholders to consider the revised cash offer.
This is Peabody's third attempt to acquire Macarthur Coal, the world's biggest producer of pulverised coal.
Macarthur earlier rejected a shares-and-cash $3.4bn takeover bid from New Hope saying the offer did not represent an adequate premium for control of the company.
Macarthur said it would hold talks with Peabody Energy on the revised cash offer and delay its shareholder vote scheduled for 19 April on acquisition of Gloucester Coal.
POSCO, a major shareholder of Macarthur, gave its in-principle support for a Peabody takeover while ArcelorMittal, the world's biggest steel maker and another important shareholder, described the bid as warranting due diligence.
Peabody's first offer at A$13 (US$12) a share was dismissed by Macarthur at the time as "an indicative, non-binding and highly conditional proposal" and was later improved to A$14 (US$13) a share.
Peabody said the new offer contains fewer conditions than its previous two proposals.
In 2009, Peabody Energy earned revenue of $6bn from sales of 244 million tons.