Aquila Resources shareholders have begun tendering their shares into Baosteel and Aurizon's cash takeover offer, gifting a majority stake to the suitors.
A shareholding notice filed by the suitors yesterday declares they have picked up 2.10 per cent of Aquila, held in the institutional acceptance facility, to take the overall stake to 21.9 per cent.
The suitors launched their bid already claiming Baosteel's 19.8 per cent holding.
Combined with the tendered stock and a commitment from Aquila executive chairman Tony Poli to hand over his 28.9 per cent stake in the absence of a higher bid, Baosteel and Aurizon have crept past the 50.1 per cent majority control hurdle.
Mr Poli will receive a $402 million cheque once he has vended his stake into the offer.
Aquila shares yesterday gained 3Â¢ to $3.38, just shy of the $3.40 bid price.
The Baosteel offer is open until July 11 although the suitors have the right to extend the deadline.
Aquila is yet to release its target statement in response to Baosteel's offer but could do so as early as today.
The target statement will explain Aquila's reason for recommending that shareholders accept Baosteel's offer, and refer to independent expert Grant Samuel's report on whether Baosteel's offer is fair and reasonable.
There is industry scuttlebutt that Grant Samuel will declare Baosteel's offer either fair or reasonable but not both.
It would add to the scrutiny of the Poli-chaired Aquila's board, which stunned the market on Wednesday by rejecting rival suitor Mineral Resources' $3.75 scrip bid, presumably because it did not offer the certainty of Baosteel's lower cash offer.
MinRes holds 12.8 per cent of Aquila - acquired at $3.75 a share - but yesterday remained tight-lipped on plans for its stake.