unveiled a $2.5 billion unsolicited bid for rival
The move by the Glendale, Calif., self-storage company came after Shurgard privately rejected Public Storage's advances last month. The smaller company, based in Seattle, said it wasn't for sale, Public Storage said.
Public Storage said it sent Shurgard a letter July 8 outlining terms of a possible merger, and Shurgard rejected the proposal July 26. Public Storage wants to give Shurgard holders a 0.8 Public Storage share for each Shurgard share. The company said the offer of $53.40 a share in stock gives Shurgard holders a 14% premium to Friday's closing price.
"We believe that the combination of Public Storage and Shurgard will enhance our position as the premier self-storage operator," said Public Storage chief Ronald Havner. "Our proposal provides Shurgard shareholders with an immediate premium for their shares and the opportunity to participate in the upside potential of the combined company. It is our preference to work cooperatively with Shurgard, and we would like to commence discussions with Shurgard immediately concerning our proposal. We believe the benefits of this combination to both companies' shareholders are simply too compelling to ignore. 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."
On Monday, Shurgard rose 11%, gaining $5.10 to $52. Public Storage was delayed at the open following Friday's close at $66.75.