Atlas Iron has urged its shareholders to accept a takeover offer from a Hancock Prospecting subsidiary.

The Atlas board says the Hancock-owned Redstone Corporation’s $390 million takeover offer “provides certainty of value” and a “compelling premium” on historical trading values.

Some independent accountants agree that Hancock’s offer is above the fair value of Atlas’s shares.

The board had previously backed Hancock’s offer over Mineral Resources’ earlier bid of $280 million, but was waiting on an independent report and target statement.

Atlas says it also completed a “detailed strategic review” with independent advisors, looking at alternatives to accepting the offer.

In the end Atlas decided the takeover was the best way out of its current financial difficulties and to avoid potential insolvency.

The company closed two mines in May and October last year, and now has just a single operational site left at Mt Webber in the Pilbara, which should close in 2022.

Shareholders have until August 3 to make their decision.