Australia's largest self-storage company is on track to move house next year after the board of National Storage (ASX: NSR) struck a $4 billion acquisition agreement with a consortium involving global investors Brookfield and GIC.
If shareholders vote in favour of the scheme at meetings in April next year, the $2.86 per share payout would represent a 26.5 per cent premium on NSR shares before the non-binding offer was made public late last month, and deliver a 438 per cent total return to remaining shareholders who took part in National Storage's 2013 listing.
The National Storage board unanimously recommends that shareholders vote in favour of the deal, provided an independent expert concludes the transaction is in their best interests.
"The NSR board believes that the consortium’s offer appropriately reflects the high quality, growth profile, scarcity and strategic scale of NSR’s asset portfolio and self-storage management platform as the leading owner operator of self-storage in Australia and New Zealand," says National Storage founder and managing director Andrew Catsoulis.
"This proposal is an endorsement of the strong fundamentals and long-term growth strategy of NSR, which has evolved from a single storage centre originally developed at Oxley Queensland in 1995 to Australia and New Zealand’s leading owner and operator of self-storage centres with over 290 centres today providing over 1.6 million square metres of state of the art storage space for its customers.
"We are confident this position will be further strengthened with the consortium’s support. Our focus remains on delivering best in class self-storage solutions for our customers across all the markets in which we operate."
A scheme implementation deed (SID) has been signed by the Brisbane-based company and two bidding companies set up by Canada's Brookfield Asset Management, on behalf of its affiliates and managed funds as well as affiliates of Singapore's GIC.
The SID entails break fees and reverse break fees of $40 million, and is also subject to conditions including Australian Foreign Investment Review Board (FIRB) the New Zealand Overseas Investment Office (OIO) approvals, court approval, and no adverse changes for the business.
The scheme will be funded through equity committed by the consortium and third-party debt financing, is not subject to any financing condition, and contains exclusivity obligations for National Storage such as “no-shop”, “no-talk”, and “no due diligence” obligations.
"The NSR board believes the transaction provides attractive value and certainty for NSR securityholders with an all-cash offer at a significant premium to the undisturbed trading price. The offer from the consortium follows a number of earlier offers and a period of negotiation," says NSR chair Anthony Keane.
"The decision to recommend this offer follows extensive work by the NSR Board and its advisers to assess the fundamental value of NSR and its medium-to-long term prospects.
"Accordingly, the NSR board is unanimous in its recommendation that the transaction represents a compelling outcome for NSR securityholders."
In a statement, the consortium describes the offer as "compelling" for NSR shareholders.
"The offer rewards NSR securityholders’ investment with a significant certain cash premium to NSR’s NTA as well as current and all-time historic trading levels," the spokesperson says.
"Brookfield and GIC both have extensive experience in the storage asset class in Australia and globally and we look forward to working with the NSR Board to complete the transaction."
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