The rail freight operator and Baoshan Iron & Steel Co Ltd (Baosteel) has offered $3.40 in cash per share in an off-market takeover.Aurizon managing director and CEO Lance Hockridge (pictured) says the investment will create jobs and boost exports in Australia.
“This proposal represents an unprecedented opportunity to co-develop world-class rail and port infrastructure in Australia, utilising Chinese and Australian capital, to deliver much needed Australian commodities to China.“There is an excellent strategic fit for both companies. It would allow Aurizon to capitalise on expertise as a builder and operator of nationally significant export supply chains, matched with the ongoing investment in Australian resources by one of China’s largest iron and steel producers,” Hockridge says.
Aurizon aims to achieve majority ownership, development and operation of multi-user port and rail infrastructure behind the West Pilbara Iron Ore Project.“This project has potential to deliver new independent, multi-user rail and port infrastructure that would create new options for mid-ties miners and increase competition for bulk logistics delivery in the Pilbara,” he says.
Aurizon will acquire 15 per cent of Aquila if successful, while Baosteel will expand its existing 20 per cent stake with the remainder.Baosteel Resources International chairman Zhihao Dai says the deal is part of the company’s global strategy to become a leading steel and resources provider.
“We believe this is a compelling offer for Aquila shareholders as it provides an opportunity for them to realise certain value for their Aquila shares at a significant premium to current market prices through an all-cash offer - at a time of uncertainty of the funding and development pathway for Aquila’s suite of greenfield projects.“Having first invested in Australia in 2002, we remain committed to a strong, secure long-term relationship with Aurizon and in investment in Australia,” he says.
Western Australia-based Aquila also has a 50 per cent interest in the Eagle Downs Hard Coking Coal project in the Bowen Basin, expected to be completed in 2017.
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