Exxaro bows out of Territory takeover

South Africa's Exxaro Resources has confirmed that it will not increase its $0.46 per share offer for iron ore miner Territory Resources, despite it being trumped by Hong Kong-based Noble Group earlier this month.

Territory Resources' board of directors had unanimously recommended shareholders accept Noble's unconditional $0.50 per share bid over Exxaro's offer, which held a 60 per cent minimum acceptance caveat.

Territory owns and operates the Frances Creek iron ore mine in the Northern Territory

Exxaro executive general manager of business growth said the company carefully considered all options, but said it would not bid above what it saw as fair value for the assets.

"Exxaro is focused on further diversifying and will continue to review a number of other potential opportunities in both iron ore on Australia.

The Exxaro offer is due to expire July 4 and any acceptances of the offer will also lapse on that date.

Exxaro said it had also received from Territory the agreed break fee of $1.56 million, as under the bid implementation agreement.

At close of trade today Territory shares had dropped nearly 2 per cent, to trade at 50 cents.