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SEATTLE-Locally headquartered Shurgard Storage has rejected an unsolicited $2.5-billion takeover bid by its Glendale, CA-based competitor Public Storage Inc. The offer, for .80 shares of PSA common stock for each share of Shurgard, represents a 14% premium over Shurgard’s stock price based on Friday’s close for both companies. Public Storage says a merger would allow a combined company to cut administrative expenses and add facilities in the US and Europe. Shurgard chairman/CEO Charles Barbo says the company’s board, with the help of financial and legal advisors, has reviewed the early July proposal and unanimously determined that Shurgard’s current business plan offers shareholders greater long-term value. As a result, Shurgard has declined to discuss the offer further with Public Storage Inc.”We believe … the proposal by Public Storage is clearly an opportunistic attempt to deprive our shareholders from fully realizing that long-term value,” says Barbo. “Shurgard has the highest quality portfolio in the storage industry and is the leader in the developing European storage market. The success of our substantial European investments is increasingly evident, as same store occupancy rates in Europe increased from 75% at the end of the first quarter to 80% at June 30, 2005. “This proposal is good for Public Storage, but bad for Shurgard.” Public Storage chief executive Ronald Havner says the 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,” he says. “We believe the benefits of this combination to both companies’ shareholders are simply too compelling to ignore… (and) we are confident that Shurgard’s shareholders and other constituencies will recognize this as a compelling opportunity and enthusiastically support it.” Shurgard operates a network of over 630 operating storage centers located throughout the United States and in Europe. Public Storage has interests in 1,480 storage facilities. The news of the proposal sent the two companies stock prices in different directions. Shares of Public Storage are trading down $1.07 (1.07%) at $65.68 and shares of Shurgard are trading up $6.97 (14.86%) at $53.87.

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