China's Baosteel Resources and its Australian bidding partner on Thursday set a deadline of July 11 on their $1 billion offer for Aquila Resources Ltd, which they are chasing for its iron ore and coal projects.

Aquila, 29 percent owned by its founder and executive chairman Tony Poli, now has until June 20 to tell shareholders whether to accept the bid.

The board has so far only told shareholders to sit tight while an independent committee reviews the bid of A$3.40 a share, which was pitched at a 39 percent premium to Aquila's share price the day before the bid was announced in early May.

Aquila's shares last traded at A$3.51, indicating investors expect a deal to go ahead at a higher price.

Baosteel, which already owns 20 percent of Aquila, and Australian rail operator Aurizon Holdings Ltd set the clock ticking on the bid on Thursday, declaring it open from June 6 and saying it would close on July 11 unless extended.

Aquila will be sending a letter to shareholders acknowledging the offer later on Thursday, a spokesman said.