New Hope Corporation yesterday launched its takeover bid for Resource Pacific, sparking a buying frenzy with Resource Pacific's share price shooting up almost 20% - marking it as the biggest resource stocks mover in dollar terms for the day.

Resource Pacific started trading yesterday morning at $A2.43 and closed at $2.91, up 19.75%.

This morning Xstrata Coal revealed its off-market takeover bid, offering $2.85 a share for the company in an unconditional cash offer.

The price offers an 85% premium to the 30-day volume weighted average price of Resource Pacific shares up to and including September 25, the day prior to New Hope announcing its intention to take over the company.

The Newpac mine is Resource Pacific's only operation and is wrapping up its first year of longwall production.

The company is currently mining one of the largest identified semi-soft coking coal resources in the Hunter Valley with over 252 million tonnes of un-mined coal resource.

In its bidder's statement to shareholders, New Hope offers 0.94 of a New Hope share for every Resource Pacific share, valuing the company at $754 million.

Xstrata's cash offer equates to a total company offering of about $960 million.

Both companies pledged to offer more security to investors through their diverse portfolios, stating that Resource Pacific's sole mine operation leaves them vulnerable.

Resource Pacific managing director Paul Jury advised the company's shareholders to take no action on either bid while the company assesses the merits of each.

Jury said the New Hope bid "fails by a substantial margin to recognise Resource Pacific's growth potential and future value".

He said Newpac was only just beginning to realise its potential and would capitalise on infrastructure investments made by the company over the past years during its 28-year mine life.

Furthermore, Jury said that financially the company was in a strong position after the $165 million funds raising venture and had developed strong relationships with blue-chip coal importers in Asia that had committed to buy 100% of the mine's 2008 saleable production.

In considering Xstrata's bid, Jury said the board at Resource Pacific needed to ensure it adequately compensated shareholders when considering the mine's expansion plans to 8Mt per annum in 2010 to coincide with increased port and rail infrastructure.

Xstrata Coal chief executive Peter Coates said Newpac was in close proximity to Xstrata Coal operations. Xstrata currently holds a 15.56% interest in Resource Pacific.

He said a bidder's statement will be dispatched to shareholders as soon as practicable and shareholders can expect to be paid within five days of selling their shares to Xstrata Coal.

The New Hope offer is open to Resource Pacific shareholders from December 3 to February 1.