Self-storage specialist Public Storage made an unsolicited $11B bid to acquire smaller rival Life Storage after it rejected an earlier offer.
The offer comes in the form of an all-stock deal worth about $129 per share. Under the terms of the deal, Life Storage stockholders would receive roughly 0.42 shares of Public Storage common stock for each Life Storage share they own.
Life Storage stock closed Friday at $100.58 per share and Monday morning rose more than 12% to about $124.60 per share.
“Our proposal would create a combined company with significant advantages, more robust operational capabilities, and a strong trajectory of profitable growth,” Public Storage President and CEO Joe Russell said in a letter Sunday outlining the proposal.
By publicizing its offer, Public Storage is hoping Life Storage shareholders will pressure management to strike a deal, The Wall Street Journal reports.
Public Storage is the largest owner in the sector, with about 2,800 units nationwide, and has grown mostly through acquisition in recent years. Life Storage has about 1,100 units.
As a CRE segment, self-storage has benefited from a rise in demand nationwide, which can be partially attributed to the shrinking footprint of the average apartment and decreasing homeownership levels.
A third-quarter 2022 self-storage report from Cushman & Wakefield showed asking rents across the U.S. grew 11.7% from the same period in 2021.
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