Yet another pair of real estate equities could merge as Europe's biggest self-storage landlord Shurgard (BE:SHUR) looks to snap up UK rival Lok'n Store (LOK) for £378mn.
Lok'n Store's board has backed the all-cash takeover, which values the company at 1,110p, a 15.9 per cent premium to its share price at yesterday's close, a 12.5 per cent premium to its adjusted net asset value (NAV) per share, and a 27.6 per cent premium to when Investors' Chronicle rated the stock as a buy in our Ideas section. The shares soared this morning to match the offer price.
The companies said the merger would "give Shurgard immediate access to attractive underlying market dynamics with strong demographic trends" in the UK, particularly in the South East and Manchester. Though Shurgard dominates self-storage on the continent, it is fourth in the UK behind Big Yellow (BYG), Safestore (SAFE), and private equity player Access Self Storage, according to the UK Self Storage Association's (UK SSA) latest report.