Shares in National Storage REIT (ASX: NSR) surged almost 20% on Wednesday after the company confirmed it was in takeover talks with private equity buyers.
The company asked for its shares to be halted from trade before the start of the session on Wednesday after The Australian reported that Brookfield Property Group and GIC Investments were running the ruler over the $3.2 billion self-storage giant.
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Company definitely in play
National Storage initially did not confirm that talks were afoot; however, late in the trading day on Wednesday, the company confirmed that it had indeed been approached about "an unsolicited, non-binding, indicative and conditional proposal".
As the company said:
Under the terms of the indicative proposal, NSR securityholders would receive $2.86 cash per stapled security on the basis that a dividend or distribution of 6 cents in respect of the financial half year ending 31 December 2025 may be paid, in which case, the cash payable per stapled security will be reduced by the amount of the dividend or distribution paid. The indicative proposal follows earlier confidential, unsolicited, non-binding and indicative proposals from the consortium and a period of negotiation including the provision of limited due diligence.
The proposal is subject to conditions, including satisfactory due diligence and a unanimous recommendation from the National Storage board. It would also be subject to regulatory approvals, including sign-off from the Foreign Investment Review Board.
National Storage stated that it had assessed the proposal and decided to grant the consortium the right to conduct due diligence.
It went on to say:
The NSR Board has also agreed to provide a period of exclusivity to the consortium ending on 7 December 2025 unless a superior proposal is received before that time and the NSR board determines to pursue it, in which case exclusivity will end at that time. The exclusivity arrangements comprise customary non-solicit, no talk, no due diligence and notification of approach obligations.
National Storage shares closed on Wednesday up 19.5% at $2.70, but still well below the potential bid price.
Takeover hype spills over to Abacus
News of the takeover approach for National Storage also put a rocket under shares in Abacus Storage King (ASX: ASK), which closed 9.3% higher on Wednesday at $1.52.
National Storage is a shareholder in Abacus, holding a stake of just under 5%, and Abacus was itself the target of takeover suitors earlier this year.
Ki Corporation and US-listed firm Public Storage (NYSE: PSA) brought a $1.47 per security bid to the company, which was rejected in May, but left Ki Corporation with a 63.5% stake in the business.
Abacus said at the time that its net tangible asset value was $1.73 based on an independent valuation, and hence the consortium's bid was too low.
