Abacus Storage King, a publicly traded, diversified real estate investment trust (REIT) that operates self-storage in Australia and New Zealand, received a conditional and non-binding indicative proposal (IP) from a consortium that includes Ki Corp. Ltd. and U.S. REIT Public Storage to acquire all of its outstanding stapled securities that aren’t already held by Ki or its subsidiaries, which amounts to about 59%. The offer valued Abacus at around AU$1.9 billion ($1.16 billion). Its stock price jumped more than 15%, a nearly six-month high, since the announcement, according to sources.
Abacus operates 126 self-storage facilities, 75 of which it manages on behalf of other owners. It also has 21 developments in progress. The company was created in 2023 when Abacus Property Group (APG) de-stapled its self-storage assets so it could be listed on the Australian Securities Exchange (ASX). APG manages the REIT and retains a minority interest.
“As a significant and long-term security holder, we have remained an active supporter and partner to Abacus Storage King and its success,” Ki CEO Bradley Fried said in a statement. “However, the entity has continued to underperform relative to peers and the broader market since listing. The demerger of 2023 has failed to deliver the promised value for security holders, and the entity’s security price has declined 18% since then. That has resulted in a negative annualized total security holder return of 7%, in ‘stark contrast’ to its ASX-listed peer group of real estate investment trusts, which have achieved an 11% gain.”
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The deal would enable Public Storage to enter the Australia and New Zealand self-storage market. The U.S. REIT holds a 35% interest in Shurgard Self Storage Ltd., which has 279 facilities in seven European countries, with approximately 15 million net rentable square feet.
Under the terms, Abacus security holders would receive A$1.47 per stapled security, less any dividends or distributions declared after the date of the IP. If the deal is approved, Public Storage would own 50% of Abacus securities, with the balance held by Ki, sources reported.
IP conditions include approval from Ki’s board committee and the Public Storage Board of Directors following a six-week due diligence period. The deal would also be subject to regulatory and other approvals, including from the Foreign Investment Review Board and the New Zealand Overseas Investment Office.
Abacus has formed a board committee consisting of its independent directors to assess the IP. Thus far, it hasn’t formed any view on its merits, a source reported. The company appointed King & Wood Mallesons as its legal adviser and Macquarie Capital Limited as its financial adviser.
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Goldman Sachs is serving as the consortium’s financial advisor. Herbert Smith Freehills and Sullivan & Cromwell are Ki’s legal advisors. Gilbert + Tobin and Wachtell, Lipton, Rosen & Katz are the legal advisors for Public Storage.
Ki is a business-management consulting firm launched by South African and Swazi real estate investor, philanthropist and billionaire Nathan Kirsh, who heads the Kirsh Group. His firm holds a majority stake in Jetro Holdings, a New York-based company that manages wholesale grocery businesses Jetro Cash & Carry and Restaurant Depot.
Sources:
Business Journal, Ki Corporation and Public Storage Offer a Premium to Acquire Abacus Storage King
AFR.com, South African Billionaire in $1.9b Play for Abacus Storage King
Abacus Storage King, Unsolicited Non-Binding Indicative Proposal to Acquire Abacus Storage King
TipRanks, Why Abacus Storage King Shares Are Rising
Reuters, Australia's Abacus Storage King Gets Takeover Bid, Valuing Firm at $1.2 Billion
