Public Storage Inc. on Monday made an unsolicited $2.5 billion public offer for rival Shurgard Storage Centers Inc. despite the Seattle-based real estate investment trust's position that it is not for sale.
The offer would exchange each share of Shurgard's common stock for 0.8 shares of Public Storage stock, representing a value of $53.40 a share based on Public Storage's closing price on Friday. That's a 14 percent premium over Shurgard's closing price on July 29.
The Glendale-based company went public with its offer Monday to make an appeal to shareholders after Shurgard's board of directors rejected Public Storage's July 8 merger offer via a July 26 letter. Public Storage said it believes a merger of the two companies would be in the best interests of shareholders. Shurgard's board denied this claim in a statement, maintaining that the company is "not for sale."
"It is our preference to work cooperatively with Shurgard, and we would like to commence discussions with Shurgard immediately concerning our proposal," said Ronald L. Havner, Jr., chief executive officer of Public Storage. "Given the substantial benefits that would result from this transaction, we are confident that Shurgard's shareholders and other constituencies will recognize this as a compelling opportunity and enthusiastically support it."
Shares of Public Storage settled down 1.7 percent to $65.60 on Tuesday. Shurgard shares rose 13 percent to $53.
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