Independent expert Grant Samuel said the offer was not fair and assessed the value of Aquila shares to be $3.90-5.24.

But noting that Aquila shares had traded well below the offer price before the bid was announced, Grant Samuel said the offer was reasonable as shareholders who accepted it were likely to be better off.

Other reasons for declaring the offer reasonable included the likelihood that Aquila shares would fall if the bid was pulled, and the bidders’ capacity to fund the $7.4 billion West Pilbara iron ore project.

Aquila released its target’s statement, formally recommending acceptance of the bid, but said its recommendation was “finely balanced” due to the belief that the price did not reflect the value of the company’s assets.

However, Aquila chairman and CEO Tony Poli told shareholders to wait and not accept the offer until July 3 – a week before it closes on July 11 – to allow a superior bid to potentially emerge.

Last week Aquila scrapped talks with new major shareholder Mineral Resources after an agreement for a competing deal was unable to be reached.

Technically, Baosteel and Aurizon already have control of Aquila, after acceptances reached 21.9%.

Combined with Poli’s 28.9% stake, which he intends to accept into the offer, the bidders have exceeded 50%.

However, Poli stressed that he reserved the right to revisit that intention and he presumably won’t accept the offer until July 3.

Baosteel and Aurizon welcomed the release of the target’s statement.

Aquila shares continue to trade at below the offer price, closing at $3.37 on Friday.