Baosteel set to win Aquila takeover

Baosteel and Aurizon look set to gain control of Aquila Resources after the iron ore hopeful rejected a takeover proposal from Mineral Resources, and instead recommended its shareholders accept the current $3.40 per share offer.

Aquila chairman Tony Poli plans to accept the offer for his 29 per cent stake in the absence of a superiod poroposal.

“As we said we would at the outset, we have given thorough consideration to the Baosteel and Aurizon offer and, on balance, we have come to the view that Aquila shareholders would be better off accepting in the absence of a superior proposal,” Mr Poli said in a statement.           

Aquila confirmed today that Mineral Resources had submitted a conditional scrip merger proposal that valued Aquila at $3.75 per share.

"Aquila had discussions with MRL concerning its proposal with a view to agreeing a recommended offer," the company said.

"Aquila and MRL were not able to agree terms that were acceptable to both parties."

Aquila's independent board committee formed the view that the Mineral Resources proposal wasn't considered superior to the current cash offer made by Baosteel and Aurizon. 

Mineral Resources said its board would consider its options for its 12.8 per cent stake in Aquila, bought on-market last week at a price of $3.75 per share.

Mineral Resources' motive for pursuing the opportunity was based on its desire to build and deliver a more attractive development proposition for the West Pilbara iron ore project than the alternatives announced to date.

"We remain of the view that the WPIOP is an atractive asset if it is developed using a fit-for-purpose development plan," Mineral Resources managing director Chris Ellison said.

MinRes said it remains prepared to enter discussions with the project stakeholders with a view to entering commercial arrangements for construction and delivery of the port and rail infrastructure and build, own and operate arrangements in respect of the development and operation of the mines. 

Baosteel and Aurizon's joint offer will remain open until July 11 2014. 

Meanwhile, the Western Australian government has released a master plan for the Anketell port project, which is a critical piece of infrastructure in Aquila Resources' proposed $7 billion West Pilbara iron ore project.