Ki Corporation, Public Storage make non-binding indicative offer (NBIO) for Abacus Storage King
Public Storage and Ki submit a non-binding offer to acquire Abacus Storage King for A$1.47 per stapled security. The deal targets 126 properties, 21 development sites, and 75 managed/licensed properties, with due diligence and securityholder approval required.
Acquisition proposal
Public Storage (NYSE: PSA) and Ki have entered into a non-binding indicative offer to acquire Abacus Storage King (ASX: ASK) at A$1.47 per stapled security. The offer is made to all outstanding securities other than those owned by Ki Group, the biggest security holder of ASK. Ki and Public Storage would both hold approximately 50% interest after the transaction.
Abacus Storage King owns 126 properties, 21 development properties, and 75 managed/licensed properties across Australia and New Zealand. The offer price is a premium for minority shareholders as it reflects the region's solid market fundamentals, including population growth and higher consumer adoption.
Strategic value and market opportunities
The acquisition is aimed at leveraging Public Storage's expertise to improve ASK's customer service, operating performance, and growth in the portfolio. The ownership trend in Australia and New Zealand is extremely dispersed, and therefore opportunities for consolidation are very strong. Public Storage currently owns/operates 3,380 self-storage properties in 40 states in the United States and has a 35% stake in Shurgard Self Storage in Europe, and therefore this move is a strategic broadening of their international footprint.
The mix of the 126 stabilized properties, 21 development properties, and 75 managed/licensed properties in the portfolio presents up-front cash flow and long-term growth potential. The consortium structure with Ki minimizes execution risk and allows Public Storage to leverage its operating systems and technology platform, as it has with its established strategy with Shurgard in Europe.
Preliminary nature and regulatory hurdles
The non-binding proposal is conditioned on a variety of matters, including due diligence and securityholder approval. Neither Public Storage nor the company guarantees that a final agreement will result or the transaction will happen. Public Storage does not expect to make further or ongoing disclosure of these initial discussions until a final agreement is executed.
Goldman Sachs$ is serving as financial advisor to the consortium, and Ki is being advised by Herbert Smith Freehills and Sullivan & Cromwell, and Gilbert + Tobin and Wachtell, Lipton, Rosen & Katz are advising Public Storage. Forward-looking statements contained in this announcement are subject to risks and uncertainties and are made on the basis of current expectations.
