European self-storage giant Shurgard to buy rival Lok’nStore for £378m
Belgium’s Shurgard has struck a takeover deal with rival UK self-storage group Lok’nStore worth around £378m, with the merger expected to involve job cuts.
Under the agreement, Lok’nStore shareholders are set to receive 1,110p per share, a premium of around 15.9 per cent to the stock’s closing price of 958p on Wednesday.
The deal also marks a 2.3 per cent premium to Lok’nStore’s all-time high closing price of 1,085p on 6 January 2022. The company has been listed on AIM since 2000.
The firms said in a joint statement that the merger would enable Shurgard to increase its footprint in the South East and Manchester, which it called “the two most attractive target markets outside of London”.
Lok’nStore has 32 properties with five under development in the South East, and five properties with three under development in Manchester.
The companies said that although there were not yet any firm proposals, Shurgard would likely axe “the majority of roles” in Lok’nStore’s administrative and head office functions following a planned evaluation of its operations.
Shurgard is also planning to align headcount at Lok’nStore’s sites with its operating model, which places fewer staff at each site than the latter firm. Shurgard expects to reduce these roles mainly “through natural attrition”.
The takeover is subject to a vote among Lok’nStore’s shareholders, requiring at least 75 per cent approval.
Marc Oursin, chief executive of Shurgard, commented: “Following several successful acquisitions over the past year, I am excited to disclose this new acquisition in the UK, which doubles our presence in the country, and accelerates our growth and expansion strategy.
“This milestone event for Shurgard adds an additional 171,000 sqm MLA, representing two full years of Shurgard’s targeted annual expansion, with new ramp-up and development opportunities to accelerate our growth in existing and new UK markets.”
Andrew Jacobs, chair of Lok’nStore, added: “Lok’nStore’s board believes the offer represents significant value for Lok’nStore’s shareholders, recognising the quality of Lok’nStore’s real estate portfolio and operational strength.
Over the years Lok’nStore has built a unique portfolio of purpose-built self-storage assets. We believe that integrating Lok’nStore’s assets and operations into Shurgard is highly complementary considering Lok’nStore’s asset locations and positioning in its markets.”