Buffalo, New York-based Life Storage Inc. has rejected an acquisition proposal by Glendale-based Public Storage. Life Storage argued that Public Storage was undervaluing the company and its future prospects in its $11 billion bid.
“After further and careful consideration, the Life Storage Board of Directors continues to believe that Public Storage’s proposed exchange ratio significantly undervalues the company, and that the proposal is not in the best interests of shareholders,” Mark G. Barberio, non-executive chairman of the Life Storage Board, said in a statement. “The board believes Life Storage will deliver greater risk-adjusted total shareholder returns as a standalone company than through the proposed transaction.”
Life Storage argued in a release that the proposal undervalues the company and “is an opportunistically timed attempt to transfer Life Storage’s upside potential to Public Storage’s shareholders.”
The company has increased its store count by nearly 50% since 2019, compared to Public Storage’s 19% growth, according to the company.
“Life Storage has a strong platform for continued growth with a diversified portfolio in high-value, fast-growing markets and a best-in-class operating platform including leading customer service and technology solutions,” Joseph Saffire, Life Storage’s chief executive, said in a statement. “The company’s successful execution has resulted in industry-leading same-store performance, expanding operating margins and a strong balance sheet. Importantly, Life Storage is positioned to build on its momentum with accelerating top-line and FFO growth supported by pricing power, multiple revenue drivers and prudent cost management.”
Public Storage publicized its plans to acquire Life Storage earlier this year.
“Our proposal would create a combined company with significant advantages, more robust operational capabilities, and a strong trajectory of profitable growth,” Joe Russell, Public Storage’s president and chief executive, said in a statement at the time. “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. We have been disappointed that Life Storage’s board has refused to engage constructively with us.”