Australia's Macarthur Coal yesterday postponed its Extraordinary General Meeting (EGM) to talk with Peabody Energy after the US coal miner raised its bid for the second time to $3.8 billion.

Commentators say even at this late stage, a surprise bid from Swiss miner Xstrata cannot be ruled out.

Queensland-based Macarthur, Australia's second-biggest coal miner and world's biggest supplier of pulverised coal to steel mills said in a statement today, ''Macarthur has considered Peabody's further proposal and intends to enter discussions with Peabody."

The board of Macarthur has also postponed its revised extraordinary general meeting scheduled for 19 April to a date, time and venue to be advised.

On 15 April Peabody Energy, the world's biggest independent coal miner had raised its offer once again by 14 per cent to A$16 a share valuing Macarthur at $3.8 billion. (See: Macarthur receives revised $3.8 billion bid from Peabody Energy)

Earlier Macarthur had refused to talk to Peabody or fellow rival New Hope Corporation on its $3.44-billion bid on the ground that their offers undervalued the company. (See: Macarthur Coal becomes hot property as more buyers enter fray)

The board of Macarthur said that it is not making any recommendations on Peabody's revised offer and has advised its shareholders to take no action.

Under the terms of the revised offer, St. Louis-based Peabody has offered the three major shareholders of Macarthur, who together own a 47.3-per cent stake, the option of retaining their stakes.

Since Peabody's offer does not dilute their stake, Macarthur's two large shareholders, steelmakers ArcelorMittal and South Korea's Posco, have given their consent for due diligence, which will give Peabody five days to examine the books of Macarthur.

Encouraged by Macarthur's ArcelorMittal and Posco, the coal miner has given Peabody five days to examine it books.

''ArcelorMittal does recognise that the Peabody offer is one that warrants Macarthur giving it due consideration and providing them the necessary time for the five days due diligence that [Peabody] have sought from Macarthur board," the world's largest steel maker said in a statement.

China's CITIC Resources Holdings, the largest shareholder in Macarthur with a-22.4 per cent stake, has not yet revealed its stand although earlier it was a firm supporter of Macarthur's plan of acquiring miner Gloucester Coal from the Hong Kong-based commodities trader Noble Group.

But with Macarthur's share price surging to A$16.54 at the close yeaterday, above the A$16 a share offer by Peabody, suggest that Macarthur's shareholders are expecting a higher bid, probably from Xstrata.

Xstrata, which has substantial coal assets in Australia, has been watching the frenzied bidding for Macarthur from the sidelines since the past week, and has hired Macquarie as an advisor for making a bid on Macarthur.