Baosteel may face rival in Aquila takeover

China’s Baosteel could face resistance in its takeover of Australia’s Aquila Resources as a rival mining company has taken up a large chunk of its shares.

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Mineral Resources Ltd announced on Thursday June 12 that it has acquired 52.64 million shares in Aquila, which is a 12.78% stake in the company, thus making it a substantial shareholder.

Mineral Resources, a mining contractor and commodity producer in Australia, said it had already invested “considerable time” and finalised its mine-to-port development plan for the West Pilbara iron ore project prior to Baosteel’s takeover bid in early May.

Baosteel might need to raise its bid with Aquila’s shares closing at A$3.61 ($3.39) on Wednesday. This is 6.2% higher than Baosteel’s takeover offer of A$3.40 ($3.19) per share.

Wednesday’s closing price was a 3.44% increase from Tuesday and its highest in more than two years.

Baosteel, which has a 19.8% stake in Aquila, had proposed a consortium with Australian rail freight operator Aurizon to take over all the shares in the coal and iron ore producer whose West Pilbara project has a designed mining rate of 30 million tpy, and requires development of port and rail.