Aquila confirmed that it received a proposal from MinRes on Monday, when the two companies entered trading halts, and discussions were held.

But both companies said this morning that discussions had been terminated after the parties were unable to reach agreement on a deal.

Instead, Aquila’s independent board committee has recommended acceptance of the Baosteel-Aurizon $3.40 per share cash bid in the absence of a superior offer.

Aquila CEO and executive chairman Tony Poli holds 28.9% of Aquila shares and plans to accept the offer, though he reserved the right to “revisit” that intention.

Baosteel and Aurizon, which hold 19.9% of Aquila, made their surprise joint bid on May 5 and sent out a bidder’s statement last week.

In a strongly worded statement, the bidders said on Friday that despite the emergence of MinRes, the cash bid was the final offer.

Aquila said it would shortly be sending out its bidder’s statement, which would contain an independent expert’s report by Grant Samuel & Associates.

But Aquila warned shareholders to take their time in case a superior proposal emerged.

“It remains possible that a superior proposal could emerge,” Aquila said.

“So, Aquila shareholders do not need to take any action immediately. There will be adequate time for Aquila shareholders to receive and consider Aquila’s target’s statement.”

It had been widely expected that Aquila would reject the Baosteel-Aurizon bid after its shares consistently traded at above the offer price.

MinRes

MinRes acquired a 12.8% stake in Aquila, with 50.2 million shares purchased at $3.75 apiece, putting the company at a loss if it sold its stake to Baosteel for $3.40 per share.

The Perth-based iron ore miner and services provider said it was keen on playing a role in the development of Aquila’s $7.4 billion West Pibara iron ore project.

“We remain of the view that the WPIOP is an attractive asset if it is developed using a fit-for-purpose development plan,” MinRes managing director Chris Ellison said in a statement this morning.

The company said it would consider its options with respect to its Aquila stake over the coming weeks.

MinRes added that it remained prepared to enter discussions over the WPIOP with a view to enter commercial agreements for construction and delivery of the port and rail infrastructure, and build, own and operate arrangements for the mine.

Signs of life in iron ore

Mining legend George Jones weighed in on the battle for Aquila at the Morgans breakfast in Perth this morning.

“It does show that the iron ore market is not dead,” he said.

“Baosteel wants it, Aquila wants it, [WPIOP parter] AMCI wants it and now MinRes wants it.

“I’d say it’s going to be a bit of a fight, but we’ll watch with interest.”

Shares in Aquila by 7.2% to $3.35, MinRes shares dropped 2.1% to $9.35 and Aurizon shares dropped 0.6% to $4.86.