Safestore Share Price (SAFE)

Is it any wonder that the UK market is so undervalued when brokers can't even be bothered to value Uk companies relative to their overseas-listed counterparts? Jefferied have just cut their target to 810p this morning but there is absolutely no way in the world that Jefferies, or any other broker for that matter, would ever accept a low-ball offer of 810p for SAFE. They are completely adrift and totally incapable of determining the value of anything. UK brokers might as well shut up shop now!

LOK this morning announced a recommended cash offer of c£378m (£11.10p per share) from Shurgard who are apparently the largest self-storage operator in Europe. Based on LOK's latest available accounts to 31 July 2023, that represents c1.64x of LOK's net assets or c1.53x of LOK's adjusted net assets.

Applying the same net asset multiples to SAFE's net assets as at 31 October 2023 (c1.93bn), you'd get a current market value of between c£2.95bn and c£3.1bn or between c£13.50 and c£14 per share!

Interestingly LOK is currently trading above Shurgard's offer price which seems to suggest that the market thinks that its offer is a bit low (although how the market suddenly arrives at that conclusion when it was only valuing LOK at c£8.70 at the beginning of the week, before the rumours seem to have started to circulate, is somewhat amusing) and that a competing offer might yet emerge.

Alessandro, SAFE's propertie are marked to market, so it's quite feasible that its profits can exceed its revenues (when valuations are rising)

Safestore quick ratio is 0.5. Just saying.

Slightly nervous about occupancy rates, but underlying earnings encouraging, and debt levels sensible. A bit sorry I didn't have the courage of my convictions last October but, given rates seem to have peaked, still worth a small punt IMO.