Public Storage PSA, the largest U.S. operator of self-storage properties has come out with an $11 billion hostile bid for Life Storage Inc LSI that would be an all-stock transaction.
Under the terms of the proposal, which was first made privately to Life Storage in a Jan. 12 letter, holders of Life Storage shares and units would receive 0.4192 shares of the company’s common stock for each share they own. That represents a 19% premium based on the 20-day trailing volume weighted average price of Public Storage and Life Storage as of Feb. 3, the company said in a release.
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Based on Friday’s closing price of Public Storage and considering the outstanding shares of Life Storage, the total deal value comes to around $10.99 billion.
“We have been disappointed that Life Storage’s board has refused to engage constructively with us. Life Storage explicitly wrote on December 29, 2022 that Life Storage is ‘not for sale,’ reaffirmed that stance in a January 31, 2023 letter without offering any avenue for further dialogue, and has been unresponsive to our outreach,” Public Storage said in a release.
Life Storage said it is reviewing the unsolicited bid and has advised its shareholders "to take no action at this time."
Value Creation: The company remains confident the deal will unlock superior growth and value creation opportunities which it said include accelerated growth and profitability, platform cost savings, expanded portfolio growth opportunity and a combined capacity to fund significant future growth at a more advantageous cost of capital.
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