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Self-storage company Life Storage rejected a takeover offer by its larger competitor, Public Storage, in a unanimous vote of its board of directors, calling the offer inadequate. Public Storage had proposed an $11B all-stock deal, or the equivalent of $129 per share of Life Storage.
“Life Storage board of directors continues to believe that Public Storage’s proposed exchange ratio significantly undervalues the company, and ... believes Life Storage will deliver greater risk-adjusted total shareholder returns as a standalone company than through the proposed transaction,” Mark Barberio, non-executive chairman of the Life Storage board, said in a statement.
Barberio did, however, also leave open the possibility that Life Storage would consider a better offer from Public Storage or any other other would-be suitor. A Public Storage spokesperson said the company would continue to pursue a deal, Bloomberg reports.
Public Storage is the largest U.S. self-storage specialist, with about 2,800 units nationwide, and has acquired a number of smaller self-storage owners in recent years. Life Storage has about 1,100 units.
Life Storage stock ticked up about 0.5% on Friday morning, to about $122.60 per share. Over the last year, its stock price has dropped about 4%. Public Storage stock dropped about 0.5% on Friday, and has lost nearly 14% over the last year.
Altogether, there are more than 51,200 self-storage facilities in the United States totaling about 2B SF, with roughly 36% of that total owned by the largest six public self-storage companies, according to SpareFoot Storage Beat. About 11.1% of U.S. households rent space at a self-storage facility.
Self-storage vacancy rates are forecast to increase slightly this year as consumers shift their spending due to the higher cost of everyday goods, Matthews Real Estate Investment Service reports. Self-storage occupancy rates have averaged above 90% since 2015.
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