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(Sharecast News) - Self-storage firm Lok'nStore said on Thursday that it has agreed to be bought by Belgian rival Shurgard in a £378m deal.
Under the terms of the acquisition, Lok'nStore shareholders will be entitled to receive 1,110p per share in cash. This is a premium of 15.9% to the closing share price on Wednesday and a 2.3% premium to the all-time closing high of 1,085p on 6 January 2022.
Lok'nStore chair Andrew Jacobs said: "Lok'nStore's board believes the offer represents significant value for Lok'nStore's shareholders, recognising the quality of Lok'nStore's real estate portfolio and operational strength.
"Over the years Lok'nStore has built a unique portfolio of purpose-built self-storage assets. We believe that integrating Lok'nStore's assets and operations into Shurgard is highly complementary considering Lok'nStore's asset locations and positioning in its markets."
Shurgard CEO Marc Oursin said: "Following several successful acquisitions over the past year, I am excited to disclose this new acquisition in the UK, which doubles our presence in the country, and accelerates our growth and expansion strategy. This milestone event for Shurgard adds an additional 171,000 sqm MLA, representing two full years of Shurgard's targeted annual expansion, with new ramp-up and development opportunities to accelerate our growth in existing and new UK markets.
"The acquisition brings with it a strong pipeline and development team, which can be leveraged to accelerate new opportunities in London, the South East and Manchester. We are excited about our ability to acquire, develop, and expand in the UK alongside our other European markets."
At 0930 BST, the shares were up 17.5% at 1,126p.
Russ Mould, investment director at AJ Bell, said: "The 15.9% bid premium looks measly and is significantly less than the 51% average premium seen on UK takeovers last year. It's therefore a surprise to see Lok'nStore chairman Andrew Jacobs refer to the offer as representing 'significant value for shareholders.'
"Lok'nStore may be a small guy in a big industry but that doesn't mean investors will accept the first bid that comes along. Don't be surprised if there is either reluctance from some shareholders to accept the offer or if another party throws their hat into the ring with a better price."
