June 13 (Bloomberg) -- China’s Baosteel Group Corp. won’t increase a takeover bid for Aquila Resources Ltd. that valued the Australian company at A$1.4 billion ($1.3 billion), pushing the target’s shares down the most in five years.
Baosteel, owner of China’s biggest listed steelmaker, and Aurizon Holdings Ltd. also won’t extend the offer period set to close July 11, the companies said today in a statement. Shares of Aquila declined 12 percent to A$3.10 in Sydney trading, the most since May 2009.
Baosteel and Aurizon, which last month bid A$3.40 a share in cash for Aquila, would get a half stake in the A$7.4 billion West Pilbara iron ore mine, port and rail project in Western Australia. Mineral Resources Ltd. yesterday filed notice of its purchase of 12.8 percent of Aquila, saying it wants to ensure the project goes into production as soon as possible.
“Baosteel and Aurizon announced the offer for Aquila shares with the intention to progress Aquila’s stalled development projects,” Baosteel said. “The full cash offer gives Aquila shareholders an opportunity to realize certainty of value for the investment at a substantial premium.”
If the bid is unsuccessful, Baosteel “sees no meaningful prospect” of being involved in the development of the Western Australia project, according to the statement.
Aquila will consider the announcement, it said today in a separate statement. Mineral Resources fell 1.6 percent.
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