Baosteel and Aurizon have launched A$1.4bn ($1.3bn) joint offer for Australian miner Aquila Resources.

The cash offer of A$3.4 per share is a 38.8% premium to A$2.45 closing price of Aquila’s share on 2 May.

BSRA and related units already hold approximately 19.8% shares in Aquila.

The proposed transaction, if completed, will see Baosteel Resources International with 85% stake in Aquila and Aurizon will hold the remaining stake.

The acquisition will allow Baosteel to build a leading global resource business through the West Pilbara Iron Ore Project and the Queensland Eagle Downs Hard Coking Coal Project.

BSRA said, "We believe this is a compelling offer for Aquila shareholders, providing an attractive premium to the current market value of their shares and certainty of value through an all-cash offer."

The Chinese firm hired Deutsche Bank as financial adviser and Minter Ellison as legal adviser.

Aquila said it will establish an independent board sub-committee to consider and evaluate the proposal and any resulting takeover offer and will update shareholders in due course.