Iron ore miner Giralia Resources Ltd's board of directors gave its go signal on the $828 million off-market takeover bid tossed by Atlas Iron Ltd and prodded its shareholders to put their stamp of approval on the proposal.

In a joint statement released on Tuesday, the two mining firms called on Giralia shareholders to take in the acquisition offer of Atlas "in the absence of a superior proposal and subject to the opinion of an independent expert, and have undertaken to support the offer through pre-bid agreements in relation to their shareholdings."

Atlas is offering Giralia shareholders two options: either 1.5 Atlas shares for every Giralia share or 1.33 Atlas shares with 50 cents cash for every share of the target miner, with its bid carrying an implied price of $4.57 per Giralia share as against the accumulated week-long volume average price of Atlas share at $3.05.

Also, the pre-bids agreements with Giralia directors embodied up to 7.5 percent of Giralia shares.

Both companies viewed the deal as mutually beneficial, citing that financial and strategic reasons are behind the merger deal considering the two miners' complementing assets and operations in the Pilbara region of Western Australia.

The deal, according to Atlas and Giralia, would also lead to considerable improvements in their resources inventory and by sharing of infrastructure and facilities, the two miners would be able to realise better commercialisation of their respective projects.

The companies both declared that "Atlas's experienced management team have the development and mine operation capabilities to maximise the value of Giralia's assets and bring them quickly and cost effectively into production."

Atlas managing director David Flanagan said that both firms maintain projects that are adjacent to each other, making the merger "great way to grow production, reduce operating costs, maximise cash flows and deliver significant value for all shareholders."

Giralia chair Graham Riley agreed and stressed that the merger deal was "compelling and would inevitably lead to the unlocking of significant latent value for Giralia and Atlas."

Following the merger's announcement, Giralia shares surged by up to 40 percent or $1.19 to $4.18 while Atlas shares retreated by 2.7 percent of eight cents to $2.88 shortly after noontime AEDT.