After accepting a £378million offer from a Belgian group of self-storage, it appears that Lok’nStore will be the next British firm to be acquired by an overseas competitor.
Shurgard’s offer works out to £11.10 per share, 15.9% higher than Lok’nStore’s closing share price on Wednesday. It is also 2.3% above the peak reached in January of 2022.
Investors seem to want more. Lok’nStore’s stock soared by 157p (16.4%) to a new high closing price of £11.15. This suggests that the stock exchange believes Shurgard must increase its bid if they want to close the deal. Another bidder is possible, according to industry watchers.
Andrew Jacobs said that Shurgard’s proposal “represents significant values for Lok’nStore’s shareholders.” We think that the integration of Lok’nStore’s operations and assets into Shurgard will be highly complementary.
Jacobs, 65 years old, is the owner of 13 percent of the company. This means that he will receive a payout worth £47 million if the takeover proceeds. Ray Davies, the finance director at 66 years old, and Simon Thomas 64, who is a non executive director, will also share a total of £23million. All three directors have pledged to support Shurgard’s offer, and recommended that other shareholders follow suit.
In 1995, Lok’nStore opened the first self-storage facility in Horsham, West Sussex. It has since grown to be one of the biggest operators on the British market with 43 sites across the country.
Shurgard, with its 276 locations in seven different countries, is one of Europe’s largest self-storage developers, owners, and operators. The company has been operating in Britain since 1999, but never beyond the M25. Marc Oursin (62), the chief executive of the group, stated that one of the main reasons for acquiring Lok’nStore is to expand into new markets. This includes the southeast of England, Manchester and other “attractive target markets” outside London.
Oursin stated, “Following a number of successful acquisitions in the last year, I’m excited to announce this new acquisition in Britain, which doubles the size of our company in the UK and accelerates the growth and expansion strategies,”
Shurgard will spend an additional £110 million to develop Lok’nStore’s pipeline of stores, renovate some existing ones, and pay the lawyers and bankers who worked on this deal.
The Shurgard offer must be approved by three-quarters of Lok’nStore shareholders at the meeting of shareholders, which date has yet to be set. The bosses expect that the deal will be finalized in July, if shareholders approve it.
The wave of consolidation that has been sweeping through the British commercial real estate sector is now affecting Lok’nStore. In the first few months of 2010, four deals were agreed, but one — Custodian Property Income’s bid for Abrdn Property Income – recently failed.
Other countries have also seen a rise in dealmaking. Overseas buyers have recently been grabbing British companies across a variety of industries. London’s critics claim that this is because UK investors do not value companies as highly as their counterparts in the United States and Europe.
Two American rivals are pursuing Spirent Communications (the telecoms testing group), and many others have either been bought or sold. Recently, bids were submitted for Direct Line and Currys, and KKR, an American private equity company, made a £1.3billion deal with Smart Metering Group (installers of smart meters) just before Christmas. Mars had acquired Hotel Chocolat a few weeks before for £534million.