It comes after Mineral Resources yesterday said it would not make a counterproposal to the A4.2c per share offer lobbed by Hancock subsidiary Redstone Corporation on Monday.
The board of Atlas this morning withdrew its recommendation of the MinRes one-for-571 scrip offer, first announced in April.
Shortly after, MinRes formally terminated the scheme implementation deed.
Atlas will have to pay MinRes a $3.12 million break fee.
The board of Atlas has determined that the Hancock offer is superior and is recommending its shareholders accept the offer.
However, it told shareholders to take no action until it receives Atlas' target's statement, which will include a recommendation from an independent expert.
Hancock's offer is set to open in around two weeks and Atlas said shareholders would have ample time to accept or reject the offer before it closed.
In the meantime, Hancock is free to buy shares on-market until the offer opens.
The offer has no minimum acceptance condition and is not conditional on due diligence, financing or regulatory approvals.
Hancock already owns 19.96% on Atlas after acquisitions earlier this month.
Hancock executive director Tad Watroba said on Monday that the Atlas assets had long‐term synergies with other iron ore assets in Hancock's portfolio.
"There is potential to unlock value through the future development of Atlas resources as part of our wider system of operations," he said.
"If we obtain control of Atlas, we intend to conduct a strategic review to better understand the most appropriate time and means to develop and integrate Atlas into the existing operations of the Hancock Group.
"The Hancock Group iron ore interests produce iron ore products that are priced off the 62% index. Some of the Atlas deposits contain elements that have complementary characteristics providing optionality and opportunity to improve the non‐iron elements of ore quality further.
"The remainder of the Atlas resources could serve to extend the life of existing Hancock iron ore interests."
Hancock said it intended to maintain the status quo, including current operations and employees, in the short-term but did not rule out suspending production or divesting non-core assets following the review.
There was no reference to port infrastructure in the 49-page bidder's statement.
Hancock owns 70% of the 55 million tonne per annum Roy Hill mine, a 50% stake in Rio Tinto's 45Mtpa Hope Downs mine, and the undeveloped Mulga Downs iron ore project.
Fortescue Metals Group still remains a major shareholder of Atlas after acquiring 19.9% of the company earlier this month
FMG CEO Elizabeth Gaines noted the takeover announcement on Monday, saying: "We will continue to assess our strategic options and do not propose to make any further comment at this time."
Patersons Securities yesterday downgraded Atlas from speculative buy to hold in the absence of a competing bid.
Atlas shares dropped by 0.1c to 4.4c, while MinRes fell by 17c to $16.40.