Etude Storage Partners Proposes to Acquire Global Self Storage for $6.15 Per Share in Cash
Etude Storage Partners has proposed to acquire Global Self Storage for $6.15 per share in cash, representing a 47% premium over the previous day's closing price and a 45% premium over the 30-day volume-weighted average price. The proposal aims to engage the Board of Directors in constructive discussions to benefit all stockholders.
The proposal by Etude Storage Partners to acquire Global Self Storage at $6.15 per share in cash represents a 47% premium to the previous day's closing price.
It also offers a 45% premium compared to the 30-day volume-weighted average price, providing an attractive opportunity for stockholders.
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Insights
For investors, this represents a tangible return on investment, especially for those who entered at lower price points. Etude's persistence, having revised their offer upwards from $5.52 and then to $6.05 before this latest all-cash bid, implies confidence in their valuation of SELF. A buyout at this premium could be an attractive exit strategy for current shareholders, particularly if they align with Etude's assessment of SELF's underperformance or future prospects in comparison to its historical share price levels.
In the short term, such a takeover bid can often lead to an increase in the target company's stock price as the market reacts to the possibility of a deal. Long-term implications hinge on the completion of the deal and the potential for operational improvements or synergies realized post-acquisition.
The decision to publicize the offer may be a strategic move to put pressure on the Board by rallying the shareholders' support, who may find the premium offer appealing. This underscores the importance of understanding the fiduciary duties of the Board to act in the best interests of the shareholders. If the Board continues to refuse engagement without a compelling reason, they might face legal challenges from shareholders, especially if the shareholders perceive the offer as superior to the value they would otherwise realize.
The legal dynamics in such a public acquisition proposal are crucial, as they can affect the negotiations, timeline and even the structure of the proposed deal. Shareholders should remain attentive to the Board's response and any justifications provided for their stance.
Proposal Represents a
May 7, 2024
Global Self Storage, Inc.
3814 Route 44
Attn: Board of Directors
Dear Members of the Board:
I am writing to you on behalf of Etude Storage Partners LLC (together with its affiliates, “ESP”, “we” or “our”). We have been stockholders of Global Self Storage, Inc. (“SELF” or the “Company”) for over five years. As you are aware, we have previously submitted two separate proposals to acquire all of the outstanding shares of common stock (the “Common Stock”) of the Company, initially at a price equal to
We believe that our proposal delivers an attractive opportunity for stockholders to obtain full and fair value that exceeds both SELF’s historical share price levels, as well as the value the Company can be expected to deliver to stockholders in the coming years. For stockholders, our proposal represents a
About ESP and its Track Record of Success
ESP is a joint venture between entities controlled by Steven Stein and Richard D. Kinder. Our affiliates own over 1.8 million square feet of self-storage and insure over 1,700 facilities nationwide. We have extensive experience investing in and operating commercial real estate portfolios of scale. Combining our self-storage expertise with
We believe that the Company’s performance could be optimized under private ownership by an investor that has the economies of scale required for the Company to build a more long-term oriented business outside of the public markets. Given our deep experience in the self-storage industry and our financial resources, we possess the speed and execution strength needed to consummate the Transaction in an expedited and efficient manner. Accordingly, we believe a sale of the Company would be the best course to allow stockholders to realize immediate liquidity and maximum value for their shares.
Additional Proposal Details
As referenced above, we have more than sufficient available equity capital to fully fund the Transaction; accordingly, the Transaction would not be subject to any financing contingency.
We propose that the Transaction be accomplished through a negotiated merger agreement. Our non-binding proposal is subject to the following conditions: (i) receipt of required Board and stockholder approvals; (ii) receipt of any required governmental and third-party approvals; (iii) satisfactory completion of due diligence; (iv) the Company’s continued maintenance of its current operations without any material and adverse changes; and (v) the execution of a definitive agreement containing terms and conditions customary for a transaction of this type and size.
We are prepared to enter into an appropriate confidentiality agreement and commence our due diligence immediately. We are confident in our ability, together with our legal advisors, Olshan Frome Wolosky LLP, to complete our due diligence, negotiate and enter into binding agreements, and consummate the Transaction on an accelerated time frame.
Our proposal is based entirely on publicly available information. If upon further due diligence, we learn information regarding the business and its prospects that evidences additional value, we are prepared to increase our proposed acquisition price to reflect this new information.
Next Steps
We believe it is incumbent on the Board, in the proper exercise of its fiduciary duties, to meet with us as soon as possible to discuss moving forward with the Transaction so that we can deliver value to all stockholders. We believe our proposal is value-maximizing, and we urge all constituencies who would benefit from the Transaction to make their views known and have their voices heard by the Board.
We look forward to working with the Board to accomplish our proposed Transaction and promote the best interests of all Company stakeholders. However, we reserve the right to take any action that may be necessary to protect and maximize Company value, which may include, without limitation, taking our proposal directly to stockholders and seeking representation on the Board.
Steven Stein
President
Etude Storage Partners LLC
About Etude Storage Partners
Etude Storage Partners is a joint venture between Etude Capital, one of the largest owners of self-storage facilities in
View source version on businesswire.com: https://www.businesswire.com/news/home/20240507891946/en/
Longacre Square Partners
Joe Germani, 646-386-0091
jgermani@longacresquare.com
Source: Etude Storage Partners LLC
FAQ
What is the proposal by Etude Storage Partners to Global Self Storage?
What is the premium offered in the proposal compared to the previous day's closing price?
What is the premium offered in the proposal compared to the 30-day volume-weighted average price?
How long has Etude Storage Partners been a stockholder of Global Self Storage?
What were the previous proposals submitted by Etude Storage Partners ?
