Life Storage, a national owner and operator of self-storage properties that was the target of an unsolicited acquisition offer from rival Public Storage, said it's open to offers but not at a discounted price based on its historical results and future growth pipeline.
The comments from Buffalo, New York-based Life Storage came after Public Storage said it was intent on continuing to pursue Life Storage.
Life Storage operates more than 1,100 self-storage facilities in 37 states, while the larger Public Storage has more than 2,800 self-storage facilities located in 40 states.
Earlier this month, Public Storage proposed an all-stock transaction valued at $11 billion. The offer would amount to a 17% premium to Life Storage’s closing price of about $111 at that time. On Friday, the stock was trading at about $120 per share. It traded as high as nearly $152 in April.
“We believe that Public Storage’s proposal does not appropriately reflect the value embedded in the upside of life storage, and our clear line of sight to continued growth and value creation,” Joe Saffire, Life Storage’s CEO, said on Friday’s fourth-quarter earnings conference call.
Public Storage’s offer was opportunistically timed and does not reflect Life Storage’s strong outlook, Saffire said.
“Public Storage is attempting to take advantage of a temporary dislocation in Life Storage’s stock price,” he said. “The proposal’s implied [next 12-month] multiple of 17.7 does not approach the longer-term average trading multiple for Life Storage and does not fairly capture the value of the company’s future growth expectations.”
During the first quarter, Life Storage acquired $142.4 million in properties and had $93.3 million more under contract, the company disclosed. In addition, it was evaluating a pipeline of $685 million more in assets, Saffire said.
“We expect to continue to build out our pipeline as we enhance our third-party and joint venture relationships, allowing us to continue to bolster our portfolio and strengthen our foundation for continued profitable growth,” he said. “We expect our store count to increase by approximately 100 over the coming year.”
Neither Life Storage nor Public Storage immediately responded to requests for comment from CoStar News.