On Monday, 5 May, Aurizon announced a $1.4 billion joint off-market bid with Baosteel to acquire 100% of the share capital of Aquila Resources Limited.

Baosteel is one of China’s leading iron and steel producers and currently has a 19.7% stake in Aquila Resources. According to mining analyst, Adrian Prendergast, this move would give Baosteel a solid foothold in the Pilbara alongside Rio Tinto, BHP Billiton and Fortescue who are currently dominating the Pilbara.

Aurizon’s CEO, Lance Hockridge, and Baosteel’s Chairman, Dai Zhihao, said they believe the offer is compelling for Aquila’s shareholders because it provides them with certainty of value at an attractive cash premium.

Aurizon and Baosteel are confident that there will not be a counter bidder with a higher offer.

The deal is subject to approval from the Foreign Investment Review Board.

The announcement and investor presentation can be viewed here.