Lok’nStore accepts £378m takeover by Belgian rival

Lok’nStore shares rose sharply on Thursday after the group revealed it had agreed to be acquired by Belgian rival Shurgard in a £378m deal.

Shareholders will be entitled to receive 1,110 pence per Lok’nStore share in cash, representing a 15.9 percent premium to the storage company’s closing price on Wednesday and a 2.3 percent premium to its all-time high of 1,085 pence.

Lok’nStore shares listed on Aim rose 17.43 per cent to 1,125 pence, having risen more than 35 per cent in the last year.

In a joint statement, the duo said the deal would allow Shurgard to increase its presence in the South East and Manchester, which it called “the two most attractive target markets outside of London”.

Shurgard is the largest developer, owner and operator of self-storage facilities in Europe, both by number of stores and leasable space.

Lok’nStore chairman Andrew Jacobs said the deal “represents significant value” for shareholders, “recognising the quality of Lok’nStore’s property portfolio and operational strength”.

He added: “We believe that the integration of Lok’nStore’s assets and operations into Shurgard is highly complementary considering the location of the assets and Lok’nStore’s positioning in its markets.”

Shurgard CEO Marc Oursin said: “Following several successful acquisitions over the past year, I am pleased to announce this new acquisition in the UK, which doubles our presence in the country and accelerates our growth and expansion strategy.

‘This landmark event for Shurgard adds an additional 171,000 m2 of MLA, representing two full years of Shurgard’s planned annual expansion, with new acceleration and development opportunities to accelerate our growth in new and existing UK markets.

‘The acquisition brings with it a strong development team and pipeline, which can be leveraged to accelerate new opportunities in London, the South East and Manchester. “We are excited about our ability to acquire, develop and expand in the UK alongside our other European markets.”

Offer premium seems “miserable”

Russ Mould, investment director at AJ Bell, said: “Another day, another UK takeover. One by one, the UK stock market is being torn apart by foreign companies snapping up UK businesses.

‘Self-storage group Lok’nStore is in the crosshairs of Shurgard, a Belgian group which has made a cash offer for the business.

‘The offer premium of 15.9 per cent appears negligible and is significantly lower than the average premium of 51 per cent seen in UK takeovers last year. It is therefore a surprise to see Lok’nStore chairman Andrew Jacobs refer to the offer as representing “significant value for shareholders”.

‘Lok’nStore may be a small boy in a big industry, but that doesn’t mean investors will accept the first offer that comes along. Don’t be surprised if some shareholders are reluctant to accept the offer or if another party jumps in with a better price.’