Shurgard Storage Centers may be finally succumbing to pressure to sell. The Seattle-based company, which rebuffed a takeover bid earlier...
Shurgard Storage Centers may be finally succumbing to pressure to sell.
The Seattle-based company, which rebuffed a takeover bid earlier this year, said in a statement Thursday it was exploring “strategic alternatives to maximize shareholder value,” including sale of the company.
Public Storage, based in California, Shurgard’s largest competitor, made a $2.49 billion hostile bid in July. Shurgard CEO Charles Barbo rejected the offer — a 14 percent premium over its $46.90 share price — as too low.
Shurgard Storage Centers
Storage Locations: 634 storage centers in 22 states and 7 European countries
’04 Sales: $426 million
’04 Profit: $45 million
Source: Shurgard Storage Centers
But some shareholders, tired of the company’s listless stock price and declining profits, favored the deal, analysts said.
In a letter last month to Shurgard’s board, Public Storage CEO Ronald Havner claimed to have the support of more than half of Shurgard’s shareholders. He also said Public Storage would improve its offer if Shurgard could justify a higher valuation of its business.
Shurgard stock ranged from $34 to $47 during the year before Public Storage’s offer.
Shurgard said it was considering forming joint ventures, selling certain assets or operations, and continuing to implement its strategic business plan. Shurgard refused Thursday to elaborate on its announcement. Public Storage officials did not return phone calls.
Two analysts who declined to be identified said today’s announcement indicated that management was taking its fiduciary duties to shareholders more seriously but cautioned that a sale to Public Storage was not automatic.
Shurgard could also follow the lead of other real-estate investment trusts this year and go private.
Headquarters: Glendale, Calif.
Storage Locations: More than 1,487 storage facilities in 37 states
’04 Sales: $927 million
’04 Profit: $366 million
Source: Public Storage
A sale would join Shurgard with a company more than twice as large in sales and U.S. storage locations but lacking Shurgard’s valuable foothold in seven European countries.
Since the takeover bid was announced, Shurgard’s share price has jumped 17 percent, to $54.26. Public Storage’s share price has fallen by about 3 percent in the same period.
On Thursday, Public Storage announced third-quarter profit of $128 million on sales of $197 million, compared with profit and sales a year ago of $97 million and $188 million, respectively.
Shurgard has not said when it will announce its third-quarter earnings.
Josh Goodman: 206-464-3347 or email@example.com