The West Australian reported that iron ore miner Territory Resources has recommended shareholders accept AUD 123 million off market cash takeover offer from South African miner Exxaro Resources.

The offer values the Northern Territory focused miner at 46 cents a share, a 64% premium to its last traded price of 28 cents.

The offer has the support of Territory's board and its 11.2% shareholder DCM but crucially, the Hong Kong based Noble Group, which holds more than 26% of Territory, has not yet confirmed its support and could alternatively consider a rival bid.

Territory said it had cancelled discussions with Noble over a proposed USD 20.7 million debt to equity swap, for which Noble earlier this month agreed to a higher price.

On May 10, Territory announced its debt would be converted into shares in Territory at 45 cents, rather than the previously agreed price of 31.5 cents.

If enacted, Territory would have received a cash injection of $15.8 million and Noble would have boosted its stake in the iron ore miner to 45%.

But Territory said in a statement today it believed the Exxaro offer is a more attractive proposition because it provided a liquidity event, whereby all shareholders would receive cash at a significant premium to the prevailing market price.

The deal is subject to a $1.5 million break fee and 60% minimum acceptances.

Azure Capital is providing financial advice to Territory and Freehills is providing legal advice.

Greenhill Caliburn and RMB Corporate Finance is financial advisor to Exxaro and Bennett & Co and Lavan Legal is legal advisor.

(Sourced from The West Australian)