Baosteel and partner Aurizon Holdings Ltd. (AZJ) “entered into an agreement with Aquila to facilitate the orderly transition of control and management,” the bidders said today in a statement. Baosteel’s A$3.40 cash a share offer values Aquila at about A$1.4 billion ($1.3 billion).
The deal will give Baosteel a share of the A$7.4 billion West Pilbara iron ore mine, port and rail project in Western Australia. It’s seeking to accelerate development to meet steel demand in China, the world’s biggest market.
Mineral Resources Ltd. (MIN), which holds 13 percent of Aquila and had made a rival takeover offer, agreed to accept the bid today. Tony Poli, Aquila’s co-founder and largest shareholder with a 29 percent stake, has also accepted the proposal, the bidders said in the statement. Baosteel holds 9 percent of Aquila, according to data compiled by Bloomberg.
Three members of Aquila’s board agreed to resign in favor of three Baosteel appointees. Together with the appointment of another director, the bidders will have control of four of the seven board seats.
Aquila will waive all remaining conditions and has recommended shareholders accept Baosteel’s offer, the bidders said. The offer period will be extended to July 25.
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