At the end of a long drawn battle, Hong Kong-based commodity trader Noble Group emerged as the favourite as the board of Australian miner Gloucester Coal Ltd declared the revised Noble bid to be a superior proposal.

This proposal is more in the interests of Gloucester shareholders than Gloucester's reverse bid for Whitehaven, the board said on Monday.

Gloucester was proposing a merger with Whitehaven via a scrip-based reverse takeover, which has an implied value of A$4.83 per share.

 In a last minute move, Noble had revised its bid offer on Friday by 17 per cent to A$572 million ($429 million for the 78.3 per cent it did not own in Gloucester, which operates the Stratford and Duralie open-cut mines, near Gloucester, in the Hunter Valley.

Gloucester had earlier resisted a $6-a-share bid from Noble in favour of an all-scrip merger with Whitehaven, which the company said would enhance its operating synergies.

Barry Tudor, the former chief financial officer of Gloucester who has since joined Noble's senior ranks, told media that he was ''very confident'' the increased offer would be welcomed by the 90 per cent of Gloucester's institutional shareholders.

The battle for control of Gloucester began in February when Gloucester managing director Rob Lord announced a friendly takeover of Gunnedah-based Whitehaven Coal.

Consequently, Noble announced a hostile bid for Gloucester on 27 February at $4.85 a share and conditional on Gloucester dropping the Whitehaven plans.

On 5 May, Noble increased its offer to $6 a share, opening a public relations campaign that included full-page advertisements in newspapers.

On Friday, the company increased its offer to $7 a share and the Gloucester board recommended that offer to its shareholders.

Whitehaven conceded defeat, by acknowledging it was highly unlikely that Noble would go away. Unless a rival bidder appears.

But, Noble's 21.7-per cent stake in Gloucester gives the commodities trader a strong position against any rival bids.

However, analysts feel the Anglo-Swiss giant Xstrata could be tempted to try again after Noble blocked its offer in 2007 of $4.75 a share for Gloucester through a scheme of arrangement.

The private American coal group AMCI, which owns 9.9 per cent of Gloucester and 13.3 per cent of Whitehaven, may also be interested, after losing perceived benefits from the abandoned merger.

Noble, with revenues of $36 billion in 2008, was formed in 1987 by chief executive Richard Elman. It holds a 68.5 per cent controlling stake in Donaldson Coal, which employs about 220 people at its Donaldson, Abel and Tasman mines, south of Maitland.

However, the Group's Q1 profit fell for the first time in two and a half years as prices of grains, coal and metals dropped because of the global recession.

The company said in a statement to the Singapore Stock Exchange that its net income declined 46 per cent to $90.2 million in the three months to 31 March 2009 from $167.1 million a year earlier. Sales fell 36 per cent to $6.08 billion from $9.5 billion a year ago.