In lodging the bidder’s statement, Baosteel Resources International Co chairman Dai Zhihao and Aurizon CEO Lance Hockridge said by accepting the offer, shareholders could avoid a number of risks.

“By accepting the offer, you will no longer be exposed to future funding risks associated with Aquila’s large greenfields projects, the West Pilbara iron ore project and the Eagle Downs hard coking coal project,” the two said in a joint letter to shareholders.

Shareholders were also warned that Aquila’s shares might fall if the offer was unsuccessful.

The letter noted that Aquila shares had not closed above the offer price since May 15, 2012.

But Aquila shares have been steadily rising since the offer was announced last week, climbing to $3.52 yesterday.

Aquila has formed an independent board subcommittee to consider the offer and has appointed Goldman Sachs as financial advisor and King & Wood Mallesons as legal advisors.

“We have also appointed an independent expert to report on the offer in light of Baosteel’s pre-existing board representation,” Aquila said.

Baosteel is already a major shareholder with 19.8% of the company and board representation.

The Chinese company noted that the likelihood of a rival bidder emerging with a superior offer was low.

Aquila told shareholders to take no action until the subcommittee made a formal recommendation.