Shares in Brambles spin-off Recall Holdings have climbed after it secured a sweetened takeover deal from US logistics giant Iron Mountain.
Six weeks after announcing their intention to merge, the two companies have signed a scheme implementation deed for Iron Mountain to acquire Recall in a deal that values the Australian-listed company at $A3.4 billion.
Under the revised deal, Recall shareholders will receive a cash payment of 50 US cents (65 Australian cents) plus 0.1722 Iron Mountain shares for every share they hold.
Alternatively, shareholders can still opt to receive an $A8.50 cash payment from a $A225 million pool provided by Iron Mountain, which was announced in April.
Recall shares gained 22 cents, or 3.1 per cent, to $7.24.
The new deal comes after a slide in Iron Mountain's share price, which lowered the paper value of the merger for Recall shareholders.
Iron Mountain shares are currently trading around $US32.30, down from around $US37.50 at the time the merger plans were announced.
The slide saw Recall shares fall drop to a four-month low of $A7.02 per share last Friday.
Iron Mountain chief executive William Meaney said the company decided to make the extra 50 US cent per share payment after it discovered the merger would lead to greater synergies than previously expected.
"It's much more related to the transaction of putting the two companies together, there was additional benefit that we found," Mr Meaney said.
Iron Mountain expects the merger to result in $US155 million ($A201.31 million) in net synergies, up from the $US125 million to $US140 million it had previously forecast.
It also expects the deal will lift its earnings per share by 20 per cent in 2017 and 25 per cent in 2018.
Following the deal, Recall shareholders will own 21 per cent of Iron Mountain, which will establish a secondary listing on the Australian stock market.
The takeover deal is subject to regulatory approvals and is expected to be completed in early 2016.
Recall chief executive Doug Pertz said the deal was in the best interests of both companies' shareholders.
"With the significant synergies and accretion generated by the combination, we believe the potential value creation for both sets of shareholders will be considerable," he said.
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