US-based logistics giant Iron Mountain is bemused with Australian data management business Recall Holdings' dismissal of its $2.2 billion takeover offer.
Recall on Monday rejected the takeover bid, arguing it undervalued the company, but left the door open to further negotiations if Iron Mountain lifted its offer.
But Iron Mountain may not be willing to lift its offer substantially, with a source close to the company saying management were "bemused" by Recall's "novel response".
They argued Recall's own estimate of its value bore little resemblance to anything seen elsewhere in the market.
Iron Mountain has put forward a $7-a-share offer, which is a nine per cent premium to the $6.40 Recall shares were trading at on Friday and 19 per cent above the $5.88 average target price analysts have put on the company.
Recall shares jumped 98 cents, or 15.3 per cent, to $7.38 on Monday.
The company said the proposed takeover had the potential to create $US3.9 billion ($A4.22 billion) in value but its shareholders would not receive an appropriate share of the windfall.
"The board believed that the proposal did not represent an appropriate sharing of the potential value creation from the transaction," Recall said.
But the Iron Mountain source noted the structure of the takeover proposal, which would have seen Recall shareholders paid $A1.27 a share in cash and the equivalent of $5.73 per share in Iron Mountain scrip, would have allowed investors to receive the full benefit of the tie-up.
Recall, which was spun out of logistics business Brambles in December 2013, said it would be open to further discussions with Iron Mountain.
"The board would be open to discussions with Iron Mountain if it were to put forward a proposal that fully reflects the significant potential value creation, and more equitably shares that value with Recall shareholders," it said.
"However, there is no guarantee that following any such discussions a transaction would be agreed to, or that the board would recommend any proposal."
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