Life Storage turns down Public Storage's $11B offer for company

Life Storage's (NYSE:LSI) board on Thursday rejected the unsolicited proposal from rival Public Storage (NYSE:PSA), saying the offer "significantly undervalues" the company as well as its prospects for future growth.

Public Storage (PSA), as previously reported, had proposed to acquire Life Storage (LSI) in a taxable transaction that would offer LSI shareholders and unitholders 0.4192 PSA share for each share or unit of LSI, giving the proposal an implied value of ~$126.14 per share or unit or an equity value of ~$11B.

Life Storage's (LSI) board said it conducted a comprehensive review process in consultation with its independent and legal advisers.

"The board believes Life Storage (LSI) will deliver greater risk-adjusted total shareholder returns as a standalone company than through the proposed transaction," said Non-Executive Chairman Mark G. Barberio. "The board is always open to and regularly evaluates opportunities to enhance shareholder value and will consider any proposal that appropriately values the company and its prospects."

The company will provide more detail regarding its decision and its financial outlook during its Q4 and full-year 2022 earnings call on Feb. 24 at 8:00 AM ET.

Truist analyst Ki Bin Kim sees a "strong probability" that Public Storage (PSA) could "slightly" increase its offer for LSI.