After several failed attempts to push for a deal in private, Public Storage is taking its case to acquire one of its top rivals straight to shareholders.
Public Storage made an $11 billion unsolicited bid to acquire Life Storage, the Wall Street Journal reported. The all-stock proposal was cemented with a letter sent to Life Storage management on Sunday.
The proposal is worth roughly $129 per share. That’s a premium over Life Storage’s stock price, which closed at $110.58 before the weekend.
Public Storage’s push to acquire its rival started in earnest in December when the company privately communicated its desire to Life Storage, which responded that it wasn’t for sale, according to Public Storage.
A month later, Public Storage made its offer privately, the same one publicized this weekend. Life Storage again rejected the company, saying the offer wasn’t in the best interest of its shareholders.
In revealing the acquisition effort, Public Storage is aiming to put the pressure on Life Storage to negotiate.
Public Storage is the largest operator of self storage space in the country. The company claimed to operate 9 percent of the self storage square footage in the nation as of the end of 2021. The Glendale-based real estate investment trust had interests in more than 2,800 facilities at the end of September.
Self storage experienced a pandemic-era boom that lasted well into last year, with rent performance and demand on the rise. As of May, more than 131 million square feet of storage space is planned or under construction nationally, including about 50 million square feet expected to be delivered in 2022 that would increase the national stock by 9 percent.
Self storage has not been immune to investors’ waning appetite of pandemic-driven sectors, however, such as industrial real estate. The stocks of both Public Storage and Life Storage are down at least 15 percent in the last 12 months after peaking in April.
