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Why National Storage shares were in a trading halt this morning

The National Storage REIT (ASX: NSR) share price was placed into a trading halt this morning, which it has just come out of. Since the resumption of trading, National Storage shares are going for $2.40 at the time of writing – virtually unchanged from yesterday’s closing price.

Why were National Storage shares in a trading halt?

The company released a price-sensitive announcement to the ASX this morning, which (according to ASX rules) requires the suspension of trading if it’s during normal operating hours.

In the ASX release, National Storage responded to ‘recent media speculation’ regarding a new bid for the company by the New York, USA-based private firm Warburg Pincus to acquire National Storage REIT. Here’s some of what the company had to say:

“The NSR Board wishes to advise its security holders that it has previously received an unsolicited confidential non-binding indicative proposal from Warburg Pincus for 100% of the issued stapled securities of NSR for a cash price of $2.20 per stapled security…

The Warburg Pincus indicative proposal was received prior to the receipt of the proposal from Public Storage (NYSE: PSA) to acquire 100% of NSR as previously announced on 14 February 2020.”

There has been something of a feeding frenzy over national Storage REIT over the past month (as alluded to in the above quote). China-based firm GAW Capital Partners was confirmed to have tabled a takeover proposal for the company last week (the offer price was initially kept confidential, but later revealed to be $2.20 per security).

Following that, the bid of $2.40 per share from Public Storage was also made public.

The result has been a rocketing share price for National Storage REIT – which had started 2020 off at $1.84 per share (a gain since of 30%).

What’s next for National Storage shareholders?

Given the amount of attention this company is attracting, it seems increasingly likely that one of the proposed takeover bids will be eventually accepted (and possibly bid higher from here).

As for a path forward, this is what the National Storage REIT board had to say:

“NSR continues to work with these three parties in relation to proposals to acquire NSR and notes that discussions with each party are at this stage preliminary and subject to a number of conditions and there is no certainty that the discussions will lead to a final recommended offer.

The Board of NSR is committed to acting in the best interests of, and maximising value for, NSR securityholders. The Board advises NSR securityholders to take no action at this time in respect of their security holdings in NSR.

NSR will continue to keep securityholders appropriately informed of any developments in accordance with its continuous disclosure requirements.”

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has recommended National Storage REIT. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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