Public Storage to buy Shurgard in $3.2B deal

/ Source: The Associated Press

Public Storage Inc., a real estate investment trust that owns self-storage centers, said Tuesday it agreed to acquire rival Shurgard Storage Centers Inc. for $3.2 billion, after having its first offer rebuffed last year.

Under the agreement, Public Storage will exchange 0.82 shares of it stock, worth about $65.16 per share based on Monday’s closing price for the stock, for each share of Shurgard. The combined company would become the largest self-storage company in the world.

The company said the price represents a 39 premium to Shurgard’s closing stock price on July 29, before Public Storage expressed interest in acquiring the company.

Public Storage said it would take on about $1.8 billion of Shurgard’s debt and redeem $136 million of Shurgard preferred stock. Public Storage also will issue about 38.4 million common shares.

In August, Shurgard rejected Public Storage’s $2.49 billion bid for the company, saying it wasn’t in the best interest of its shareholders.

Shurgard shareholders will own about 23 percent of the combined company.

The companies expect the transaction, which must be approved by regulators and shareholders, to close by the end of the second quarter.

Goldman Sachs serves as Public Storage’s financial adviser, and Citigroup and Banc of America Securities serve as financial advisers to Shurgard.