updated 8/1/2005 4:06:58 PM ET 2005-08-01T20:06:58

Shurgard Storage Centers Inc., a real estate investment trust specializing in self-storage facilities, said Monday that its board has rejected an unsolicited $2.49 billion acquisition offer from rival Public Storage Inc.

Earlier today, Public Storage announced its proposal to acquire Shurgard, despite the company's assertion that it was not for sale.

Shurgard said its board unanimously rejected the proposal after determining it would not be in the best interests of shareholders.

"We believe our current strategic plan provides superior, compelling long-term value to our shareholders, and the proposal by Public Storage is clearly an opportunistic attempt to deprive our shareholders from fully realizing that long-term value," said Charles Barbo, Shurgard chairman and CEO, in a statement. A Shurgard spokesman said the company does not have any additional comment on the proposal outside of its statement.

As part of the deal, Public Storage offered 0.8 shares of its stock for each share of Shurgard, representing a current value of $53.40 per share based on Public Storage's July 29 closing price. This represents a 14 percent premium to Shurgard's stock price at Friday's close.

Public Storage said it believes a merger would be in the best interests of the shareholders of both companies. Public Storage noted that it met with Shurgard last month, but the company refused to enter into formal talks.

"We believe that the combination of Public Storage and Shurgard will enhance our position as the premier self-storage operator," said CEO Ronald L. Havner Jr. in a statement. "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."

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