Baosteel in joint cash offer for Australia's Aquila Resources

Baosteel Resources Australia, a unit of China's largest steel maker Baosteel, and Australian rail freight operator Aurizon Operations Ltd. on Monday announced a joint all-cash offer to acquire Aquila Resources Ltd.

The two offered to pay 3.4 Australian dollars ($3.2) per share in cash, valuing the Australian development-stage mining company at about 1.4 billion Australian dollars ($1.3 billion), Baosteel said in a statement.

The cash offer represents a 38.8 percent premium to the closing price of 2.45 Australian dollars per share on May 2, the last trading day prior to the announcement.

Baosteel Resources Australia is a wholly owned subsidiary of Baosteel Resources International Co., the overseas resources development arm of Baosteel Group Corporation. Aurizon is a wholly owned subsidiary of Aurizon Holdings Limited, Australia's leading bulk rail freight operator.

Baosteel Resources International Co. currently holds a 19.8 percent stake in Aquila.

If the acquisition goes smoothly, Baosteel Resources International will own up to 85 percent of Aquila and Aurizon will own the remaining 15 percent, said the statement.

The acquisition is in line with Baosteel Resources International's strategy of building a leading global resource business through the development of the West Pilbara Iron Ore Project and the Queensland Eagle Downs Hard Coking Coal Project, it said.