Atlas Iron's board has backed a takeover bid by billionaire Gina Rinehart after rival bidder Mineral Resources pulled out of contention.
The board is now recommending shareholders accept Ms Rinehart's all-cash bid, which values the junior miner at $390 million and trumped the $280 million all-scrip offer made by Mineral Resources in April.
Atlas had asked Mineral Resources to respond to the larger bid, which came from a subsidiary of Ms Rinehart's Hancock Prospecting, but the ASX-listed mid-tier miner declined to do so.
"A majority of the Atlas board has now withdrawn its recommendation of the MinRes scheme, and recommends that Atlas shareholders accept the Hancock Offer, in the absence of a superior proposal and subject to an independent expert concluding (and continuing to conclude) that the Hancock offer is fair and reasonable to Atlas shareholders," Atlas said in a statement on Thursday.
Atlas will have to pay Mineral Resources a $3.12 million break fee.
The offer from Hancock Prospecting's Redstone represents a 44 per cent premium on the Atlas stock value before Ms Hancock and Andrew Forrest's Fortescue Metals Group each took a near-20 per cent stake in Atlas earlier this month, apparently in response to the Mineral Resources bid.
Announcing its increased shareholding on June 7, Fortescue said it did not intend to support the takeover offer by Mineral Resources, but gave no indication it would launch a rival bid.
Atlas' assets include a stake in a joint venture that holds rights to potentially valuable undeveloped port capacity in Port Hedland, which UBS analysts suggested may have been the focus of Fortescue's interest.
Atlas shares jumped 22 per cent to 4.4 cents after the Hancock bid was announced on Monday, apparently in anticipation of an escalating bidding war.
They were up 1.1 per cent at 4.45 cents at 1455 AEST on Wednesday, while Mineral Resources shares were up 1.8 per cent at $16.44.