Aquila dives as China’s Baosteel warns no better bid coming

Shares in Australian Aquila Resources (TSE, ASX: AQA) took a steep dip Friday after Chinese steel giant Baosteel Resources said it would not sweeten its $1.3 billion takeover offer for the iron ore and coal explorer.

Aquila’s stock closed down 12.43% to A$3.10, the most in five years as Baosteel chairman Dai Zhihao threatened to dump the company's 19.8% stake and any involvement in the West Pilbara project if the bid failed.  It also warned that, as agreed with its partner Aurizon Holdings (ASX:AZJ) would not extend the offer period past the July deadline.

The statement came after Mineral Resources Limited (ASX:MIN) acquired a 12.78% stake in Aquila Thursday, prompting rumours of a rival takeover bid in the horizon.

Aquila dives as China’s Baosteel warns no better bid coming

The Australian firm has continued to tell its shareholders to take no action on the offer as it prepared its target statement, which is to be released next week.

Baosteel and Aurizon are chasing Aquila for its 50% stake in the stalled $7 billion West Pilbara Iron Ore (WPIO) rail and port project and a coal mine in Queensland.

WPIO holds than 2 billion metric tons of resources, just below the 2.4 billion metric tons that Australian billionaire Gina Rinehart has at the Roy Hill project, also in the Pilbara and due to start producing next year.