Mining services firm Mineral Resources has announced an off-market takeover bid to acquire Polaris Metals.

The offer, which has been recommended by Polaris directors, includes one Mineral Resources share for every 12.5 Polaris shares, valued at 38 cents per Polaris share based on Mineral Resources’ last traded share price on 14 August.

A separate offer will be made for all Polaris options currently on issue, Mineral Resources said.

Mineral Resources will provide Polaris the capability to advance its deposits into production in a short time frame and in an extremely cost effective manner using proven methods, Mineral Resources MD Peter Wade said.

“Mineral Resources’ Board is confident that combining the companies and potentially realising the upside offered by the combined group, with its exposure to the Asian markets, will be a dramatic value driver for the shareholders of both Polaris and Mineral Resources,” Wade said.

The offer represents the culmination of a comprehensive process undertaken by its board to identify the optimal route to develop its Yilgarn Iron Ore project and other projects in the Yilgarn and Pilbara, Polaris said.

Polaris major shareholder Heron Resources has entered into a pre-bid acceptance agreement with Mineral Resources over its 19.9% stake in Polaris.