Public Storage has made an unsolicited offer of $11 billion to acquire Life Storage in an all-stock transaction. The public proposal comes after two similar, private bids were rejected in December and January.
The offer comes at a time when—despite the self storage sector still showing strong fundamentals—a slowdown may be in sight due to economic headwinds.
Founded in 1982, Life Storage currently operates approximately 1,200 self storage facilities encompassing more than 68 million square feet across 37 U.S. states and the District of Columbia. Meanwhile, 1972-founded Public Storage has interests in 2,836 self storage facilities in 40 states, totaling approximately 202 million rentable square feet, as of September 2022.
Deal specifics
Under the terms of the initial proposal, holders of Life Storage shares and units would receive 0.4192 shares of Public Storage common stock for each Life Storage share or unit they own, which represent a 19 percent premium based on the 20-day trailing VWAPs of Public Storage and Life Storage as of Feb. 3. Public Storage also announced that it has increased the company’s regular common quarterly dividend by 50 percent, from $2 to $3 per share.
According to The Wall Street Journal, the stock proposal is worth some $129 per share, with Life Storage shares closing on Friday at $110.58.
The bid came in the form of a publicly disclosed letter, which was initially a private offer made on Jan. 12 that was rejected by Life Storage. The content of the letter revealed that Public Storage made its first bid back in December 2022, with Life Storage executives rebuffing the proposal, stating that the company was not for sale.
Yesterday, as a result of the disclosed offer, Life Storage released a separate statement confirming that it had received the proposal and that it was reviewing the bid. The REIT advised its shareholders to take no action at this time.
Goldman Sachs & Co. serves as the financial adviser for Public Storage and Wachtell, Lipton, Rosen & Katz acts as the company’s legal adviser. Life Storage chose to work with Wells Fargo Securities for financial advice and Hogan Lovells US for legal support.
