UPDATE 1-China's Baosteel faces possible rival for Aquila Resources

Tue Jun 10, 2014 11:20pm EDT

* New stakeholder snaps up 12 pct stake in Aquila

* Mineral Resources to comment on talk it bought Aquila stake

* Baosteel unlikely to offer 10 pct more for Aquila - source (Adds Aquila, Mineral Resources comments)

MELBOURNE, June 11 (Reuters) - China's Baosteel Resources may have to raise its bid for Aquila Resources Ltd after a new stakeholder bought into the iron ore and coal developer at a price 10 percent higher than Baosteel has offered.

About 12 percent of Aquila's shares traded at A$3.75 a share, the company said on Wednesday, adding it had not been able to confirm speculation that the buyer was mining services firm and iron ore producer Mineral Resources Ltd.

"Aquila's independent board sub-committee welcomes this recognition that the value of the Company's shares is well in excess of the current $3.40 cash per share conditional off-market takeover offer by Baosteel Resources Australia Pty Ltd and Aurizon Operations Limited," Aquila said on Wednesday.

Mineral Resources sought a trading halt, saying it would comment on a report in the Australian Financial Review on Wednesday that it had bought shares in Aquila.

Baosteel and Australian rail operator Aurizon Holdings Ltd formally launched a bid for Aquila at A$3.40 a share last week, valuing the company at A$1.42 billion ($1.33 billion).

They are chasing Aquila for its 50 percent stakes in an undeveloped $7 billion iron ore mine, rail and port project in Western Australia that was put on ice two years ago, and a coal project in Queensland.

The bid needs acceptance from at least 50 percent of Aquila's share base.

If Mineral Resources has a 12 percent stake and is opposed to the bid, it could team up with Aquila's executive chairman Tony Poli and Aquila co-founder Charles Bass, who together own about 40 percent of the company, to block the deal.

Aquila's shares jumped as much as 8 percent to a two-year high of A$3.77 on Wednesday after the block trade went through and last traded at A$3.61.

Aquila so far has told shareholders to sit tight while an independent committee reviews Baosteel and Aurizon's offer and has not spoken to Baosteel. The company has until June 20 to issue a formal response to the bid.

A person familiar with Baosteel's bid said the Chinese firm, which already has 20 percent of Aquila, and Aurizon were unlikely to raise their bid to A$3.75 a share.

"I don't think they'd be willing to pay anything like that," the person said.

Mineral Resources chief executive Chris Ellison was not immediately available for comment. An Aurizon spokesman did not immediately respond to requests for comment.

($1 = 1.0675 Australian Dollars) (Reporting by Sonali Paul; Additional reporting by Thuy Ong, Byron Kaye and James Regan; Editing by Richard Pullin)