Public Storage (PSA) makes an $11 billion unsolicited offer for Life Storage (LSI)

February 6, 2023 5:54 AM EST

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Public Storage (NYSE: PSA) has made an $11 billion unsolicited offer for its smaller rival Life Storage (NYSE: LSI), the company confirmed in a press release. The bid is worth around $129 a share, as Wall Street Journal reported earlier.

The all-stock transaction values Life Storage at roughly $15 billion on an enterprise basis. Under the terms of the proposal, Life Storage shareholders would receive 0.4192 shares of Public Storage common stock for each Life Storage share or unit they own. The price offers a 19% premium based on the 20-day trailing VWAPs of Public Storage and Life Storage as of February 3, 2023, PSA said.

“Our proposal would create a combined company with significant advantages, more robust operational capabilities, and a strong trajectory of profitable growth,” said Joe Russell, Public Storage’s President and Chief Executive Officer. “Our compelling offer to Life Storage shareholders includes a substantial immediate equity premium, a turbo-charged share of the combined company, and the opportunity to participate in the upside we intend to create together.”

Russell added that he is disappointed that Life Storage’s board has “refused to engage constructively with us.” He noted that the first approach was turned down in December while the second bid, detailed in yesterday’s press release, was rejected on January 31.

Life Storage confirmed that they received the unsolicited all-stock proposal from Public Storage, which will be reviewed. PSA hopes that by going public with its takeover attempts it will force LSI’s board to come to the negotiating table.

Public Storage is the largest storage operator in the country with 9% of the market share.

Life Storage shares are up over 13% in pre-market Monday while PSA stock is down over 1%.

By Senad Karaahmetovic

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