ASIC’s Greg Tanzer says auditors must be appropriately qualified. Photo: Louise KennerleyAustralia’s corporate regulator has cancelled the registration of 440 self-managed superannuation fund auditors after they failed to meet competency standards.
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The Australian Securities and Investments Commission has also disqualified two self-managed super fund (SMSF) auditors.

The regulator said of the 440 auditors whose registration was cancelled, 373 did not attempt the exam and 67 did not pass the exam. Auditors were given up to two attempts to pass it. ASIC oversees the registration of thousands of SMSF auditors.

“As the SMSF sector continues to grow in popularity with Australian investors, it is critical that SMSF auditors play their key gatekeeping role,” commissioner Greg Tanzer said.

“ASIC will continue to administer the registration process to assure Australians that SMSF auditors at least meet base standards of competency and expertise.”

The regulator has also separately been looking at ­self-managed super fund seminars for evidence of misleading and deceptive conduct, following a sharp rise in promoters recommending that investors either set up or use an existing fund to invest in property.

The financial systems inquiry headed by former Commonwealth Bank boss David Murray suggested SMSFs not be allowed to leverage into property. It recommended banning limited recourse borrowing because of concerns it could, over time, increase risk in the financial system. The ban suggested would only apply to future sales, rather than forcing funds to unwind existing property holdings.

In the meantime both ASIC and the Australian Taxation Office will continue to monitor the sector.

SMSF auditors who have had their registrations cancelled can re-apply for registration if they have passed the competency exam in no more than two attempts over 12 months.

From July last year the law has required all auditors of SMSFs be registered with ASIC and meet minimum competency requirements.

ASIC approved 7038 of the SMSF auditor registration applications before July last year, with 1421 of these being registered on the condition that they passed the exam by July 1 this year.

ASIC said the SMSF auditors with an exam condition had audited fewer than 20 SMSFs in the 12 months prior to their application and that they were not registered company auditors.

Technical director at the SMSF Professionals’ Association of Australia, Graeme Colley, said the industry body supports ASIC’s move to weed out the auditors who were failing to meet the required standards.

“People should have done the exam and some didn’t,” he said. “These people exaggerated what they actually did – we support the actions of ASIC.”

SMSFs represent the fastest growing segment of Australia’s $1.8 trillion retirement savings sector.

Data from the Australian Taxation Office showed that there were 534,176 SMSFs in June this year, with over 1.01 million members.

SMSF trustees are seen as the most lucrative segment of the superannuation sector, with financial planners and accountants often vying aggressively for their business and fees. Around 40 per cent of trustees’ assets are lumped in Australian shares, and 20 per cent in cash.

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Application upheld: Brian Bradbury during a public appeal in 2012 for information about his wife’s killing. Photo: Wolter PeetersThe NSW government has been ordered to pay the legal costs of a Sydney hospital cleaner who was accused of the brutal murder of his wife only for the charges to be withdrawn due to a lack of evidence, days before his trial.
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Brian Thomas Bradbury was accused of hog-tying and bludgeoning Lynette Bradbury, 52, with a dumbbell at their home in Oatlands on Halloween night in 2011.

The grandfather pleaded not guilty and a six-week jury trial was set down to begin in the NSW Supreme Court on November 3.

But on October 27, the Director of Public Prosecutions, Lloyd Babb, SC, decided the case shouldn’t go ahead “because there was no reasonable prospect of conviction” and the murder charge was dropped four days later.

On Monday, Acting Justice Matthews upheld an application by Mr Bradbury and his legal team for remuneration from the state for his legal costs, likely to have run into the thousands if not tens of thousands of dollars.

Acting Justice Matthews upheld Mr Bradbury’s argument that it was not reasonable for the prosecution to commence proceedings against him given the facts in the case.

“On the face of the Crown case statement, it always seemed to me that this was a particularly weak circumstantial case,” Acting Justice Matthews said.

“It largely depended on inferences to be drawn from difficulties in their relationship because of Mr Bradbury’s gambling, from the fact that there had been no forcible entry to the house and there had been only minimal disturbance inside it, and a few other relatively minor factors.”

Acting Justice Matthews noted that the absence of forced entry was rendered insignificant by the fact that the laundry door was left unlocked on the day in question.

Further, a neighbour later told police that before the killing she had overheard three youths walking past the house discussing a robbery and declaring “let’s do it on Halloween”.

On the evening of the killing another neighbour saw three young men of similar description walking towards the house, one of whom was cradling a piece of timber in his arms.

The Crown argued that because Mr Bradbury had waived his right to a committal, and not sought a formal notice of abandonment of the proceedings, the state was not obliged to pay his legal costs.

But Justice Matthews rejected this argument.

It is now up to the NSW Attorney General to determine the size of Mr Bradbury’s legal costs and to reimburse him accordingly.

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Khyarne Biles, Murray Haar, Jessica Wade, Laura Fitzgerald, Tyron Clayworth, Haylee Solomons celebrate the graduation of six Indigenous doctors from UNSW.Six new Indigenous Australian doctors graduated from the University of NSW on Monday, the highest number in a single year and a record the university is already planning to beat with another 10 on track to graduate next year.
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“Having Indigenous doctors is important for Indigenous health and these medical graduates are a bit like a light on the hill for other Indigenous students,” said UNSW’s Dean of Medicine Peter Smith.

“It’s all part of the cycle for improving things. Indigenous graduates will have a better understanding of the cultural needs of the Indigenous community and also, having Indigenous students in our program acculturates the other students to understand an Indigenous point of view and issues.

“It’s not just about the doctors these students will be when they graduate, it’s the influence they have on the medical school and the medical class.”

Three of the six new doctors are planning to work in rural areas.

Khyarne Biles, who is going to work in Dubbo, said: “I grew up in Dubbo and there’s a high number of Indigenous people there, and I can offer to help. In the end, that’s where my heart is.

“Obviously, it’s an opportunity for me to give back to the community, both Indigenous and non-Indigenous.”

Tyron Clayworth, who wants to be a rural GP, said graduating “is like a dream, it’s just surreal”.

“My grandma tells a story about how she gave me a plastic stethoscope when I was five and I’ve wanted to be a doctor ever since then, so it’s incredible that it’s actually happened,” said Mr Clayworth.

“I think I’m a role model in the sense that if I can do it, anyone can. I’m not the best student but I just knuckled down and worked really hard.”

There are currently 49 Indigenous students enrolled in medicine at UNSW and a total of 310 across the country.

The six new graduates bring the number of Indigenous doctors in Australia to 204. About 2895 are needed to achieve population parity.

In 2008, the Australian Government committed to the Close the Gap initiative to achieve equality in health outcomes and life expectancy between Indigenous and non-Indigenous Australians by 2031.

The life expectancy for Indigenous Australians is currently about 11 years behind that of other Australians, and the gap in health outcomes is widening for a variety of conditions including diabetes, heart and kidney disease and asthma.

“We made a decision some years ago to play our part in improving Indigenous health outcomes by putting our efforts into graduating Indigenous doctors,” said Mr Smith.

“The completion rate for Indigenous students is not any different from non-Indigenous students. People say ‘well you bring them into medicine and then what happens’, well the completion rate is roughly the same.

“All we want is for them to graduate and be successful, and be beacons for Indigenous success in the country.”

All six of the students received residential scholarships and help from the university’s Indigenous support program. Mr Smith is calling for the introduction of government funding to improve the number of Indigenous graduates in the field of medicine and in other areas.

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A screenshot from Channel Seven of tactical police as hostages leave the Lindt cafe. Photo: Channel Seven NSW Police Deputy Commissioner Catherine Burn: Task Force Pioneer has been activated for the first time. Photo: Les Smith
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NSW Police Deputy Commissioner Catherine Burn addresses the media on Monday. Photo: Kate Geraghty

Martin Place siege – Live updatesGunman holds hostages in Lindt cafeStay clear of windows: police Cafe worker missed siege by momentsFlag in cafe window not Islamic State’s

The NSW Police have activated Task Force Pioneer, meaning the hostage situation in Sydney’s Martin Place is seen as a terrorist attack against the city.

Deputy Commissioner Catherine Burn announced the taskforce had been activated just before 4pm on Monday. It is not the first time Pioneer has been used but police would not say when, and where, it had been activated previously.

Task Force Pioneer is headed up by Assistant Commissioner Mark Murdoch. Mr Murdoch is the force’s counter-terrorism boss. He is also the man who oversaw the lengthy siege-style situation at Mosman in 2011 when a suspected collar-bomb was placed on teenager Madeline Pulver.

Ms Burn made the announcement moments after three men managed to escape from the Lindt Chocolat Cafe, six hours after the hostage situation began. Two other workers managed to escape a short time later. On Monday night it remained unclear how many people were inside the cafe.

Task Force Pioneer, used only when responding to a terrorism-related incident, means a co-ordinated police operations centre has been established. Regular briefings will also be held to keep the public aware of what is happening.

“We still don’t know what the motivation might be,” Ms Burn said. “But in terms of our protocols we’ve set up our command and control protocols.”

“When we do have a major incident such as this, we set up our police operations centre … so that we are ensuring that we have the best police response, that includes investigators, that includes logistics, that includes all resources and long-term planning.”

Ms Burn said an exclusion zone was in place.

“We have a perimeter set up and the perimeter is around Hunter Street, Pitt, King and Elizabeth [streets],” she said.

“Aside from trains not stopping at Martin Place, the network is operating as it normally would.”

Ms Burn said police negotiators had made contact with the gunman but his motive was still not clear and warned that it was unhelpful to speculate what might have sparked Monday’s attack.

“Police negotiators have had contact and they continue to have contact and we will work through this,” she said. “As long as nobody gets hurt, we want to resolve this peacefully. That’s what we are working towards.

“Our negotiators are extremely experienced and skilled at what we are doing.”

Earlier, Commissioner Andrew Scipione stopped short of calling the incident a terrorism event but said police had moved to a footing similar to dealing with a terrorist attack.

He said at the time police were dealing with a hostage situation with an armed offender.

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Priceline Pharmacy Photo: Adam McLeanCarolyn Cummins
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The battle for supremacy in the cosmetics market, triggered by the arrival of Sephora, has started, with rival Priceline Pharmacy firing the first salvo.

In a quickfire campaign, CBD shoppers were given $10 Priceline vouchers recently, aimed at reminding customers that the store sold a large variety of cosmetics and beauty accessories.

They were distributed from a pop-up booth in Sydney’s city Pitt Street Mall.

Sephora is the largest seller of beauty and cosmetics under one roof. It opened in Sydney on December 5 and will be a direct threat to department stores Myer and David Jones, as well as other cosmetic merchants, in a sector that generates high margins for the stores.

It has 1500 standalone stores around the world and plans to open 20 in Australia with an aim of snaring 10 per cent of the lucrative cosmetics market.

To show their own strength, Priceline Pharmacy has added to its large network, with two new shops in Sydney CBD at the Galleries (Victoria), being the ex-Kookai site on George Street, and at 710 George Street in Chinatown.

Retail experts said the entry of Sephora will comprehensively affect the Australian department stores, challenging the traditional retail model around beauty products (makeup, fragrances, skincare, etc), where Myer and David Jones have not had to compete with a large, global, vertically integrated player with a strong brand, low cost base and developed online offering.

Macquarie Equities analysts agreed the entry of Sephora will affect the Australian department stores, challenging the traditional retail model around beauty products.

“We estimate revenue of about 1 per cent to 2 per cent of group sales come from Sydney City cosmetics department alone, which is most at risk from the entry of Sephora,” the brokers said.

“A Macquarie survey indicates Myer is more exposed to competition in cosmetics as 98 per cent of Myer customers in Sydney expect to visit Sephora.”

The Macquarie report added that in the Myer first quarterly results, sales conference, the management highlighted cosmetics as the “standout performer … having delivered 10 consecutive quarters of growth”.

“The impact on the second quarter comparative sales for Myer will likely be material given it opened on December 5,” the Macquarie analysts said, “the start of the key Christmas-January trading period. We estimate cosmetics account for 15 per cent to 20 per cent of sales while also being the most productive category. We estimate cosmetics account for about 25 per cent [to] 30 per cent of earnings. The competitive impact of Sephora is likely to impact both sales and margins, increasing as the Sephora store rollout progresses to other major retail centres.”

Mark O’Keefe, general manager of marketing for Priceline Pharmacy, said the December campaign aims to capitalise on what is typically high traffic in Sydney, especially the CBD, in the lead-up to Christmas.

“The Outdoor campaign has given us the perfect canvas to set out our beauty credentials, whilst reinforcing that as a pharmacy we meet all health needs as well,” Mr O’Keefe said.

Leif Olson, director retail services at CBRE, said is “fantastic to see a retailer taking their competition head-on using effective marketing to do it”.

“Australian retailers should employ more of these tactics,” Mr Olson said.

“Retailers are not sitting back watching their slice of the pie disappearing to internationals coming into the market.

“Another retailer that has used some great marketing has been  Charles Tyrwhitt, a shirtmaker from London. They have flooded newspapers and magazines with brochures advertising  affordable business shirts.”

Mr Olson said “CT” has not hit the Australian shores with bricks and mortar stores, only online. They have recently had their advertising on the back of Virgin domestic boarding passes, which is an innovative, targeted marketing to their customer.

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Treasurer Joe Hockey and Finance Minister Mathias Cormann on Monday. Photo: Alex EllinghausenThe federal government’s budget deficit will hit a staggering $40.4 billion this year, Treasurer Joe Hockey says, with the budget to return to surplus one year later than expected in 2019/20.
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The deficit has blown out by $10 billion more than expected six months ago.

Mr Hockey announced on Monday that the federal government has been forced to make dramatic adjustments to its first budget after huge falls in commodity prices have led to the biggest drop in the terms of trade since records began in 1959.

“This has been faster and deeper than anyone expected,” Mr Hockey said in Canberra.

Falling commodity prices and lower wages growth in the last six months have cost the federal budget $31.6 billion in tax receipts. Government payments have also risen, and Senate obstruction has cost the budget another $10.6 billion over the next four years.

Overall, Mr Hockey said the government’s six-month budget update predicts a $43.7 billion deterioration in the budget’s position over the next four years.

These figures come with worrying signs for the economy.

Journalists read their copies of the MYEFO ahead of the update from the government. Photo: Alex Ellinghausen

Treasury now expects the unemployment rate to rise to 6.5 per cent in 2014/15 and 2015/16, which is up by 0.25 percentage points from their last prediction six months ago.

Economic growth is now expected to stay at 2.5 per cent in 2014/15 but then increase to near trend in 2015/16.

The huge fall in global commodity prices – including a 30 per cent drop in iron ore prices since May – has led to company tax receipts being revised downwards by $2.3 billion in 2014/15 and another $14.4 billion over the forward estimates.

Weaker wage and employment growth will hit income tax receipts by $2.3 billion in 2014/15 and $8.6 billion over the next four years.

Mr Hockey said “we need to lift economic growth to 3 per cent and beyond to get more jobs” and to decrease unemployment.

“There is still much work to be done but we are on the right track,” he said.

Journalists get their copies of the MYEFO on Monday. Photo: Alex Ellinghausen

The cost of compromising and negotiating with the Senate has cost the budget $7.2 billion over four years, with the largest impact coming from changes negotiated during the repeal of the Minerals Resource Rent Tax, which cost $6.6 billion.

The Abbott government estimates it has implemented around 75 per cent of the more than 400 budget measures, but the delays in implementing major savings have already cost the budget $3.4 billion.

A total of $33.9 billion in budget improvement measures are still yet to pass into law, including $5 billion of measures outlined by Labor while they were in government.

The government says it has improved the budget position by $3.2 billion over four years as a result of policy decisions taken in MYEFO, including slashing 175 government agencies and making billion dollar cuts to foreign aid.

Labor blames falling confidence

But Labor treasury spokesman Chris Bowen said the MYEFO showed the Coalition’s promise to return to surplus had been “put off to the never never” while he predicted the government’s promise to spur the creation of a million jobs was “simply not going to be met”.

“This is not just about the price of iron ore, I wont play the game of blaming the Treasurer for reductions in iron ore prices, what I will hold the government and Treasurer to account for is the smashing of consumer confidence, which is now 18 per cent lower than it was before the election,” he said.

“The fact is that employment growth has slowed dramatically after his budget, consumer confidence, business confidence and employment growth have been adversely affected.

Mr Bowen said Labor had already helped pass more than $20 billion in savings and would be as constructive as it could be, “if we are satisfied they represent good policy … but we are not going to walk away from our values.

“We will provide our comprehensive economic and fiscal plan over the course of the next 12 months,” he said.

He said Labor would not proceed with the Coalition’s paid parental leave scheme, and would cancel the Direct Action policy and be “fair dinkum” about multinational tax evasion.

National security measures have cost the budget $1.3 billion so far, including $630 million to tackle terrorism and $306 million for the most recent military deployment in Iraq.

This all comes after mounting speculation that the Reserve Bank may have to cut the official cash rate to a record-low 2 per cent some time next year.

Child care costs

Treasurer Hockey said child-care payments had increased in the last six months because more parents had been participating inthe workforce.

He also said income support payments had increased by more than expected because more families were remainingin lower incomethresholds and therefore claiming more benefits.

To confront these issues, Mr Hockey said the government will announce a “comprehensive families package” inthe new year that would include child-care and parenting leave initiatives.

“This package willdeliver greater workforce participation, opportunities for parents,” he said.

He also urged the Senate topass the measures that represent outstanding structural savings.

“These initiatives in health, education and welfare areessential for the medium and long-term benefit of theAustralian people,” Mr Hockey said.

But the Treasurer said the government had decided to deal with the huge fall in the terms of trade and the subsequent deficit blow-out by behaving differently from previous governments.

“Previously governments have chosen in these sorts of circumstances to spend more money – we haven’t,” he said.

“What we’ve chosen to do is to allow the revenue to take the hit but continue with our path of fixing up spending, having structural saves that over the medium term deliver a sustainable and believable surplus.

“This is a stark reminder … you need to have a strong budget to be able to take the hits of unexpected external events on the economy.”

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Treasurer Joe Hockey and Finance Minister Senator Mathias Cormann reveal the MYEFO figures. Photo: Alex EllinghausenAnalysis: Hockey may never deliver a surplusAid budget plunges to lowest in Australian historyBudget deficit will hit staggering $40.4 billion
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When it was announced last week that the mid-year budget papers would only be handed to journalists as Joe Hockey started his press conference on the matter, the accusations started to fly that the government was trying to avoid scrutiny.

But when when the Treasurer appeared half an hour late for his mid-year economic update on Monday, no one was crying “no fair”.

Hockey, usually so full of economic swagger, was full of sorrow.

“I apologise for the delay for obvious reasons,” he said quietly, noting that he was “very familiar” with the Lindt Cafe that was currently under siege in the middle of the Sydney central business district.

In the Blue Room at Parliament House, Hockey and Finance Minister Mathias Cormann stood wearing blue ties, framed by two blue Australian flags.

The budget deficit would blow out to $40.4 billion this year, the newly released glossy documents revealed, and Australia was not “projected” to return to a surplus until 2019-20.

Commodity prices and wages growth were down, Hockey explained, but the government wanted people to know the nation’s books were not out.

“Ladies and gentleman, the Commonwealth budget is stronger today than it was last year,” he offered.

Cormann, his ministerial chum, chimed in hopefully with the observation that: “there’s much more work to be done of course, but we’re on track”.

But one got the feeling that their hearts were not quite in it.

Hockey asked that more technical questions could be asked “offline” and later told the room that he did not “want to be political today”.

However, he did perk up when asked how voters could believe there would a surplus in 2019-20 when they had been dudded so many times before on the pledge.

The Treasurer was quick to observe that he had never promised a surplus timeline before, unlike his economic nemesis, Wayne Swan.

“I have been at pains not to do that, having witnessed the ugly episode of my political opponents in trying to do that,” Hockey said.

He showed a similar level of fight when asked what his message was to pre-Christmas shoppers in light of the Sydney siege.

“Look, we cannot allow these events to shut down our country, to shut down who we are as an Australian people,” he said, staring down the barrel of the camera.

“No matter how horrific these events can be, we cannot allow ourselves to be intimated.”

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The must have toy of the 90s was Tickle me Elmo. PHOTO FDC.
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This was basically Sesame Street’s Elmo with an electronic computer chip housed in its stomach that would produce a “giggle” when it was tickled. It was the must have toy of 1996 creating quite the shopping frenzy.

Power Ranger’s were big in the 90s. PHOTO FDC.

After the first series of the successful show a full line of toys were released in 8” figures, representing each of the Rangers and four of the Aliens. Each wasfully-pose-able, but lacked the kung fu action. It wasn’t long before a line of Karate Action Rangers were introduced that could bust a few kung fu moves of their own.

So many of these little critters to chose from . PHOTO FDC.

With 20 million to collect, it is no wonder Beanie Babies spawned a fad.

No, really what is it? PHOTO FDC.

One of the most popular toys of the decade provided about an hour of entertainment until its batteries were forcefully removed because of its repetitive noises. What even is a Furby?

Pokemon was huge in the 90s. PHOTO FDC.

The only thing more awesome than the cards? The games.

Decorate you own bear. PHOTO FDC.

You could actually draw flowers and smiley faces and hearts all over their fabric skin and it came off in the washing machine. It was like a modern day miracle.

The cool way to get around in the 90s. PHOTO FDC.

So different to roller skates, Roller blades or Inline skates were the new mode of getting around in the 90s. If you could stay upright they were guaranteed to make you look cool.

Troll dolls were weird but popular. PHOTO Getty images.

These weird little fellas really didn’t seem to have much of a purpose but were kinda cute in a kinda creepy way.

Key chain pets. PHOTO FDC.

This little guy was an electronickey chainthat doubled as a pet you had to take care of. You could virtually feed yourpet, clean up virtual poo and take it for virtual walks – real responsibility.

Portable music on CD. PHOTO FDC.

It’s hard to top something that could bring you the gift of music, even if that gift skipped a lot.

And then there was colour. PHOTO FDC.

Nintendo Game boy revolutionised playing computer games – you could carry it around. This was pretty grouse for kids in the 90s.

Sony Playstation was a popular 90s gift. PHOTO FDC.

Sony’s Playstation 2 was the highest selling game console of all time.

Nintendo 64 was huge. PHOTO FDC.

Considered by many who grew up in the 90s as the holy grail of childhood entertainment. The sleek black box will remain a fond cornerstone of the memories of childhood in the good old 1990s.

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Brambles chief Tom Gorman spun off Recall last year to strengthen his company’s balance sheet. Photo: Louie DouvisRecall Holdings chief executive Doug Pertz says his board is open to an improved offer from Iron Mountain, but he dismissed the United States paper storage giant’s $2.2 billion takeover bid as inadequate, given the huge amount of value that could be created in a merger.
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The ASX-listed document management business rejected on Monday a non-binding, indicative offer from Iron Mountain valuing Recall at $7-a-share. The offer comprised $404 million of cash and $1.82 billion of Iron Mountain stock.

“We think $7 [a share] is inadequate based on the huge amount of synergies,” Mr Pertz, who is based in Atlanta in the United States, said.

Recall estimates that the offer, revealed by Fairfax Media on Sunday, gives its shareholders less than 5 per cent of the $US3.9 billion of additional value created by the companies combining.

Recall shares surged 17 per cent to $7.48 late on Monday, a record high since it was spun out of logistics giant Brambles at about $4.15 a share last year.

In an unorthodox move for a takeover target, Recall lodged an extensive slide presentation with the ASX detailing its estimates of the synergies Iron Mountain could realise by acquiring Recall and the implied Recall share value.

Recall estimates Iron Mountain, its only listed peer, could generate about $US250 million a year in synergies from the deal.

Assuming $US250 million of synergies, Recall published a table estimating a share price of $14.01 would offer its shareholders 50 per cent of the value created.

Mr Pertz said the numbers were not “drawing a line in the sand” and he did not think Recall was entitled to 50 per cent of the value uplift if a deal was done.

“We’ve never said anything about 50 per cent. I don’t think the acquired company should get the bulk of the synergies or that they should be evenly shared. They should be appropriately shared,” he said.

“The message here that’s loud and clear is there is a substantial amount of value because of this unique combination.”

Sources close to Iron Mountain said the company was bemused by Recall’s rejection and the lofty numbers it was using in its defence.

The New York listed company was yet to respond by the time of publishing, but it is likely to lodge a statement on Tuesday outlining why $7 a share is a solid offer.

Some sources interpreted Recall’s estimates as an attempt to kill the deal and suggested there was a chasm between the two parties on value.

Mr Pertz said the board was willing to re-engage and the estimates were intended to keep his shareholders informed, not to stymie a deal.

“I have no plans to talk to them [Iron Mountain]. We have given them a signal here. The board does not support this offer, but it would be open to conversations if we put forward a proposal that more equitably shares value,” he said.

CIMB analyst Mark Williams told clients Iron Mountain’s unique position to extract synergies could force it to pay up to $8 or $9 a share.

But he warned that an aggressive defence by Recall risked Iron Mountain walking away and Recall’s share price tanking.

Recall was trading at $5.10 a share before takeover speculation emerged.

In September, Recall denied speculation it had been approached by Iron Mountain, but the takeover talk boosted the company’s share price 11.6 per cent to $5.60.

“There has been speculation there was going to be an approach,” Deutsche Bank analyst Cameron McDonald said.

“It becomes a discussion about what the company thinks is a fair and equitable sharing of the synergies.”

Iron Mountain, which is being advised by Goldman Sachs, has a market capitalisation of $US7.6 billion and is the global leader in document management and paper storage. It reported full-year revenue of $US3.03 billion for the year ended December 31, 2013.

Recall is being advised by UBS and Bank of America Merrill Lynch.

The offer is subject to due diligence, a unanimous recommendation by Recall’s board, exclusivity and regulatory approvals. Competition concerns could arise from combining the number one and number two players in the industry.

Recall was spun out of logistics giant Brambles in December last year. Brambles decided to proceed with a demerger, after a long sale process that failed to attract worthwhile bids.

Iron Mountain is understood not to have taken part in those discussions because of concerns in Recall about sharing sensitive information with its biggest competitor.

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