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Public Storage (NYSE:PSA) Sweetens the Bid for Life Storage
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Public Storage (NYSE:PSA) Sweetens the Bid for Life Storage

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Public Storage sent a revised bid to acquire Life Storage and expand its foothold in the U.S. self-storage space. By sending an open bid, Public Storage hopes to garner the support of Life Storage shareholders to go ahead with the deal.

American international self-storage company, Public Storage (NYSE:PSA) sweetened its bid to acquire smaller rival Life Storage (NYSE:LSI). After failed negotiations in the past two months, Public Storage is now offering $129 per share in an all-stock acquisition deal. In effect, each Life Storage shareholder would receive 0.4192 shares of Public Storage, implying a 19% premium based on the 20-day trailing volume-weighted average prices of PSA and LSI stocks as of Friday.

The revised unsolicited offer was sent to Life Storage on Sunday. The revised bid estimates Life Storage at an enterprise value of roughly $15 billion, including debt.

Public Storage, a real estate investment trust (REIT), is one of the largest players in the U.S. public self-storage market. The company has grown over the years through acquisition, and by combining with Life Storage, it aims to have “a bigger real-estate portfolio and to reap economies of scale from tenant reinsurance, third-party property management and other areas,” a WSJ report stated.

Year to date, PSA stock has gained 12.5% while losing 9.3% over the past year. On the other hand, LSI stock is up 16.3% so far in 2023, while it lost 14.8% in the past 12 months.

Is PSA a Good Stock to Buy?

With one Buy versus one Hold rating, PSA has a Moderate Buy consensus rating. Further, the average Public Storage price forecast of $335 implies 8.6% upside potential to current levels.

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