SEATTLE-Locally headquartered Shurgard Storage released on Monday a letter from its suitor, Glendale, CA-based Public Storage, along with a lengthy presentation on why its shareholders should continue to ignore the company’s advances, which began in July with a $2.5-billion purchase offer. The offer, a 14% premium to Shurgard’s share price at the time, was flatly turned down by Shurgard executives as too low.
Last week, Public Storage said its bid was based on information available to the public and asked Shurgard to provide additional non-public information to support its assertion that its offer was too low. Public Storage also said in the letter that shareholders who collectively own more than 50% of Shurgard shares have told Public Storage they “strongly endorse” the idea of a merger between the companies, though Public Storage did not say whether the shareholders strongly endorse the current deal terms.
“We suspect you have heard the same message, too,” states the letter signed by Public Storage chief executive Robert Havner. “As we have repeatedly stated, it is our preference to enter into a negotiated transaction with Shurgard. This will save both of our companies the time and expense of special meetings, proxy contests, litigation, unilateral exchange offers and other expensive and time-consuming measures.”
In its presentation, Shurgard says the company’s not for sale at Public Storage’s offer price because its growth prospects in both the US and Europe are superior to PSA’s. Moreover, it says a merger would reduce Shurgard’s net asset value and its FFO growth.