Peabody had entered a merger implementation agreement on July 6 to buy Excel for $8.50 per share, but today’s offer comes amid rumours a counter-bid could be on the cards.

According to a Sydney Morning Herald report, counter-bids were most likely to come from a North American rival, with Arch Coal, Consol Energy, Fording Coal Trust and Massey Energy touted the most likely contenders.

Peabody spokesman Vic Svec told Associated Press that “based on recent events, the company believed it was appropriate to modify its proposal.”

Peabody, the world’s largest private-sector coal company, is in a strong position to take over Excel with solid financial backing, operations already in Australia and support from the Excel board in absence of a superior proposal.

“Peabody believes that the advance purchase of 19.99 percent of Excel and the modified scheme of arrangement will help to ensure a successful acquisition,” Peabody said.

Peabody has secured the necessary regulatory and third party approvals, and arranged financing for the acquisition. The shareholder approval process under the scheme of arrangement is underway, with a shareholder meeting currently scheduled for October 4.

“The combined operations of Excel and Peabody Pacific provide numerous synergies and an extensive growth platform to serve high-demand markets on five continents," Peabody chief Gregory Boyce said.

Excel entered a trading halt yesterday, closing at $8.41.