Public Storage, the largest operator of self-storage properties in the US, has called on Life Storage’s board to engage in discussions regarding a proposed $11bn (€10.1bn) bid for the smaller NYSE-listed rival.
Public Storage said as part of a proposal that was first made privately to Life Storage in a 12 January letter, it is offering Life Storage shareholders 0.4192 shares of Public Storage common stock for each Life Storage share or unit they own, a deal that represents a 19% premium the shares’ last trading price.
Joe Russell, Public Storage’s president and CEO, said: “Our proposal would create a combined company with significant advantages, more robust operational capabilities, and a strong trajectory of profitable growth. Our compelling offer to Life Storage shareholders includes a substantial immediate equity premium, a turbo-charged share of the combined company, and the opportunity to participate in the upside we intend to create together.
”We have been disappointed that Life Storage’s board has refused to engage constructively with us.
Russell said Life Storage wrote on 29 December 2022 that Life Storage is not for sale, reaffirmed that stance in a 31 January 2023 letter ”without offering any avenue for further dialogue, and has been unresponsive to our outreach”.
”We strongly urge the Life Storage board to act in the best interests of its shareholders and enter into good faith discussions with us regarding the proposed transaction’s benefits.”
In response, Life Storage said the proposal received appears to be ”substantially similar in all material respects to a privately submitted proposal” previously reviewed by the Life Storage board of directors.
“Notwithstanding, the board, in consultation with its financial and legal advisors, will carefully review the proposal and determine the course of action that it believes is in the best interests of all shareholders.”
Life Storage urged its shareholders to take no action at this time.
Public Storage, which also operates under the Shurgard brand, has more than 2,900 facilities across the US and also operates in Belgium, Denmark, France, Germany, the Netherlands and the UK.
Life Storage operates around 1,200 self-storage facilities encompassing over 68m sqft in 37 states and the District of Columbia.
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