Recall today rejected a more than $2 billion takeover offer from US-based logistics giant Iron Mountain, saying the price did not reflect the combined value of the businesses.

Recall (REC) said it had received a $7 per share offer from Iron Mountain, which would value the company at $2.2 billion.

But Recall’s board of directors have rejected the deal because it “did not reflect the fundamental value” of the company.

“It will be a missed opportunity on Iron’s Mountain’s part,” Mr Pertz told The Australian today.

“The amount of accretion that will flow to Iron Mountain’s shareholders in a merger deal is substantial here.”

Mr Pertz revealed that Iron Mountain made its first formal approach with a non-binding, conditional offer on Thursday afternoon while the Recall board was holding a regularly scheduled two-day meeting.

That meeting continued on Friday before the board resolved to reject the proposal.

He confirmed the management teams of both companies and their advisers had held “very preliminary, informal” talks since September.

Recall shares have surged in trading today and are currently up 17 per cent at $7.50, well above the $7 offer price.

In a statement earlier, Recall said the proposed takeover had the potential to create $US3.9 billion ($4.22 billion) in value but its shareholders would not receive an appropriate share of the windfall.

The offer comprised of around 18 per cent cash and 82 per cent Iron Mountain shares.

“The board also believes that the proposal does not reflect the fundamental value of Recall, which it believes is underpinned by the delivery of its strategic plan developed since the company demerged from Brambles in December 2013,” the group said.

Additionally, the board contends that the proposal does not reflect an adequate control premium, especially for a highly accretive strategic transaction.

“The board believed that the proposal did not represent an appropriate sharing of the potential value creation from the transaction,” the company said.

Recall, which demerged from Brambles in December 2013, called the offer price, which was a 9 per cent premium to its closing price on Friday, “insufficient”.

But the company said it would be open to further takeover discussions if Iron Mountain lifts its offer.

“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.”

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”, AAP reports.

They argued Recall’s own estimate of its value bore little resemblance to anything seen elsewhere in the market.

US giant Iron Mountain in $2bn bid for Recall

Analysts at UBS this month estimated Iron Mountain could pay $9 a share due to the stronger US dollar and its rising share price on the New York Stock Exchange, which has been driven by its recent conversion into a real estate investment trust to boost payouts.

The move on Recall continues the rush of corporate activity before Christmas, including China Communications Construction Company’s $1.2bn purchase of Leighton’ contracting division John Holland and APA Group’s $5bn buyout of BG Group’s Queensland coal-seam gas pipeline — the second-biggest acquisition of the year.

It marks a strong end to the year for deal-making after the bumper start slowed down in the second half amid an uptick in global concerns. It is also continues the deep history of demerged companies attracting takeover attention.

Recall, which is listed in Australia but led by Mr Pertz who is based in the US, has seen its shares soar 27 per cent since late September when Bloomberg ­reported Iron Mountain was considering a move on its smaller rival.

UBS analyst Simon Mitchell estimated Iron Mountain could extract up to $270m in cost synergies.

Shareholders in Recall, which include notable fund managers Maple-Brown Abbott and ­Australian Foundation Investment Company, are understood to be keen for at least 25 per cent of the synergies to go to them.

Under the terms that have been proposed, it is less than half that, sources said. Iron Mountain also trades on a multiple of 13 times versus Recall at 9.9 times, so the deal would be instantly accretive even without the synergies.

Iron Mountain’s move continues a surge in deals in the US records management industry, with Access snapping up a range of businesses from Cintas and Recall this month buying Business Records Management for $US77m.

Recall has made six acquisitions since July as it chases growth after years of being in limbo through Brambles’ unsuccessful attempts to sell the business and then the demerger last year.

The Americas made up 42 per cent of Recall’s $836m in sales revenue in full-year 2014, ahead of Europe, Australia and New Zealand and Asia.