UPDATE 2-Macarthur Coal says still in talks amid bid reports

(Adds details, updates share price, changes dateline)

By Fayen Wong

PERTH, May 5 (Reuters) - Australia's Macarthur Coal Ltd (MCC.AX: Quote, Profile, Research, Stock Buzz) said it was still in talks with an unnamed third party, but had received no formal proposal, as media reported a Chinese shareholder was lining up a $830 million deal to raise its stake.

Responding to continuing market speculation, Macarthur said on Monday it was likely discussions with the third party would take a considerable time to complete, with no certainty any formal proposal would be made.

"As such, any reference to the quantum of any proposal in recent media speculation is incorrect," Macarthur said in a statement.

China's state-owned CITIC Group, which owns 19.9 percent of Macarthur, is considering a bid to raise its stake in the coal miner in a deal estimated to be worth $830 million, the South China Morning Post quoted unnamed sources as saying on Monday. [IDnHKG66348]

The paper said Switzerland-based mining giant Xstrata Plc (XTA.L: Quote, Profile, Research, Stock Buzz) was also in takeover talks with Macarthur Coal, while BHP Billiton (BHP.AX: Quote, Profile, Research, Stock Buzz), Rio Tinto (RIO.AX: Quote, Profile, Research, Stock Buzz) and Brazil's Vale (VALE5.SA: Quote, Profile, Research, Stock Buzz) had considered bidding for the stake held by CITIC and Macarthur's founder Ken Talbot, who has been selling down his stake of around 24 percent.

It added that Australian mining tycoon Nathan Tinkler, who owns about 10 percent of Macarthur, would follow Talbot in selling his stake in the coal miner.

A spokesman for Xstrata declined comment on the report, while CITIC was not immediately available for comment.