A $1 billion bid for Australian resources firm Aquila has refocused attention on the country's iron ore sector, with one analyst telling CNBC he would not rule out a rival offer for the company.
Baosteel, China's largest listed steelmaker and Australia's Aurizon on Monday launched a bid for Aquila Resources in a move that could open up a new iron ore export region to supply Asian steelmakers.
"It's a very interesting asset, something the Chinese would love to get their hands on and their offer gives them a reasonable chance of acquiring the assets," Gavin Wendt, founding director and senior resource analyst at MineLife told CNBC's "Street Signs Asia" Monday.
Baosteel and Aurizon are offering A$3.40 ($3.15) in cash per share for Aquila – a 39 percent premium to where Aquila shares traded on Friday, before the offer. Aquila shares soared 39 percent in Sydney on Monday to a high of A$3.41.
"You can't rule out the potential for rival offers," Wendt added. "You have to bear in mind that these are very good assets. Although they haven't been developed yet, finding a single vehicle that has high quality iron ore in a politically safe destination like Western Australia and also has high quality coking coal is few and far between."