Shurgard Storage Ctr (NYSE:SHU)
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Public Storage, Inc. (NYSE:PSA)(PCX:PSA) and Shurgard
Storage Centers, Inc. (NYSE:SHU) announced today that the Boards of
Directors of both companies approved a definitive merger agreement
under which Public Storage will acquire Shurgard at a total
transaction value of approximately $5.0 billion. Under the
transaction, which is taxable, Public Storage will issue approximately
38.4 million shares of common stock, will assume approximately $1.8
billion of Shurgard debt and $136 million of Shurgard preferred stock
will be redeemed. The transaction is targeted to close by the end of
the second quarter 2006.
Under the terms of the merger agreement and upon close of the
transaction, each share of Shurgard common stock will be exchanged for
0.82 shares of Public Storage common stock, representing a current
value per Shurgard common share of $65.16 based on Public Storage's
close on Monday, March 6, 2006. This represents a 39% premium to
Shurgard's closing stock price on Friday, July 29, 2005, the last day
prior to when Public Storage publicly announced its proposal to
acquire Shurgard. Upon closing, Shurgard's shareholders will own
approximately 23% of the outstanding shares of the combined company.
The merger will enhance the size of the nation's largest
self-storage company with a combined total market capitalization of
approximately $18 billion and with ownership interest in over 2,100
facilities in 38 states and seven European nations.
"The combination of Public Storage and Shurgard creates the
largest self-storage company in the world, with significant operating
platforms in both the United States and Europe, and enhances our
prospects for continued growth and improved profitability," said
Ronald L. Havner, Jr., President and Chief Executive Officer of Public
Storage. "We are pleased that Shurgard's Board of Directors and
management have recognized the compelling financial and strategic
benefits of this transaction. This transaction provides Shurgard's
shareholders with a substantial premium for their shares and the
opportunity to benefit from participation in the upside potential of
the combined entity. We look forward to creating additional value for
the shareholders of the combined company."
David K. Grant, President and Chief Executive Officer of Shurgard,
stated, "This merger represents a win-win situation for both Shurgard
and Public Storage shareholders. A few months ago, we initiated a
process to determine the best course of action for our Company. After
reviewing a number of strategic alternatives, it is clear that this
transaction is the best option to create long-term value for our
shareholders. There are very few real estate asset classes that are as
scalable as self-storage and none that benefits as much from economies
of scale. Our combined employees represent the best and the brightest
in the industry with deep experience in every aspect of the business
in eight different countries. So there is a huge opportunity for these
two groups of employees to benefit from each other's experience and
ideas."
Given the geographic overlap of the Public Storage and Shurgard
portfolios, economies of scale are expected in media. Other savings
are expected to be achieved by reducing duplicate expenses for Yellow
Pages and other advertising, management information systems and other
back-office functions.
Public Storage will retain its headquarters in Glendale,
California. Dave Grant will remain with the Company at least through
the close of the transaction. An independent member of Shurgard's
Board of Directors will join the Public Storage Board of Directors
upon closing.
The transaction is subject to customary closing conditions and
regulatory approvals and the majority approval of both companies'
shareholders. Members of the Hughes family, who collectively own
approximately 36% of Public Storage's outstanding shares, have agreed
to vote their shares in favor of the transaction. Similarly, Charles
K. Barbo, Chairman of Shurgard, has agreed to vote his shares in favor
of the transaction.
In connection with the transaction, Goldman Sachs is serving as
exclusive financial advisor to Public Storage, and Wachtell, Lipton,
Rosen & Katz is serving as its legal counsel. Citigroup Corporate and
Investment Banking and Banc of America Securities LLC are serving as
financial advisors to Shurgard, and Willkie Farr & Gallagher LLP and
Perkins Coie LLP are serving as its legal counsel.
Analyst/Investor Conference Call and Web Cast
A conference call has been scheduled for Tuesday, March 7, 2006,
at 8:00 a.m. (PST) to discuss the merger. The participant toll free
number is (877) 368-5103 (conference ID number 6282604). A
simultaneous audio web cast may be accessed by using the link at
www.publicstorage.com under "Corporate Information, Investor
Relations." A replay of the conference call may be accessed through
March 13, 2006 by calling (800) 642-1687 or by using the
aforementioned web link. Both forms of replay utilize conference ID
number 6282604.
About Public Storage, Inc.
Public Storage, Inc., an S&P 500 company, is a fully integrated,
self-administered and self-managed real estate investment trust that
primarily acquires, develops, owns and operates self-storage
facilities. The Company's headquarters are located in Glendale,
California. The Company's self-storage properties are located in 37
states. At December 31, 2005, the Company had interests in 1,501
storage facilities with approximately 92 million net rentable square
feet.
Additional information about Public Storage, Inc. is available on
its website, www.publicstorage.com
About Shurgard Storage Centers, Inc.
Shurgard Storage Centers, Inc. is a real estate investment trust
headquartered in Seattle, Washington. Shurgard specializes in all
aspects of the self-storage industry and operates a network of over
644 operating storage centers located throughout the United States and
in Europe.
Forward-Looking Language
This press release contains "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. All statements other than
statements of historical facts included in this press release are
forward-looking statements. All forward-looking statements speak only
as of the date of this press release. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors that
may cause the actual results, performance, achievements or
transactions of Public Storage, Shurgard and their affiliates or
industry results or the benefits of the proposed merger to be
materially different from any future results, performance,
achievements or transactions expressed or implied by such
forward-looking statements. Such risks, uncertainties and other
factors relate to, among others, difficulties encountered in
integrating the companies, approval of the transaction by the
shareholders of the companies, the satisfaction of closing conditions
to the transaction, inability to realize or delays in realizing the
expected synergies, unanticipated operating costs and the effects of
general and local economic and real estate conditions. Additional
information or factors which could impact the companies and the
forward-looking statements contained herein are included in each
company's filings with the Securities and Exchange Commission. The
companies assume no obligation to update or supplement forward-looking
statements that become untrue because of subsequent events.
Additional Information and Where to Find It
This press release does not constitute an offer of any securities
for sale. In connection with the proposed transaction, Public Storage
and Shurgard expect to file a joint proxy statement/prospectus as part
of a registration statement regarding the proposed merger with the
Securities and Exchange Commission. Investors and security holders are
urged to read the joint proxy statement/prospectus because it will
contain important information about Public Storage and Shurgard and
the proposed merger. Investors and security holders may obtain a free
copy of the definitive proxy statement/prospectus and other documents
filed by Public Storage and Shurgard with the SEC at the SEC's website
at www.sec.gov. The definitive joint proxy statement/prospectus and
other relevant documents may also be obtained free of charge from
Public Storage or Shurgard by directing such request to: Public
Storage, Inc., 701 Western Avenue, Glendale, CA 91201-2349, Attention:
Investor Relations or Shurgard Storage Centers, Inc., 1155 Valley
Street, Suite 400, Seattle, WA 98109-4426, Attention: Investor
Relations. Investors and security holders are urged to read the proxy
statement, prospectus and other relevant material when they become
available before making any voting or investment decisions with
respect to the merger.
Public Storage and Shurgard and their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies from the shareholders of Public Storage and
Shurgard in connection with the merger. Information about Public
Storage and its directors and executive officers, and their ownership
of Public Storage securities, is set forth in the proxy statement for
Public Storage 2005 Annual Meeting of Shareholders, which was filed
with the SEC on April 7, 2005. Information about Shurgard and its
directors and executive officers, and their ownership of Shurgard
securities, is set forth in the proxy statement for the 2005 Annual
Meeting of Shareholders of Shurgard, which was filed with the SEC on
April 7, 2005. Additional information regarding the interests of those
persons may be obtained by reading the proxy statement/prospectus when
it becomes available.