The $1.62bn National Storage REIT has received a takeover bid from Gaw Capital Partners.
The company confirmed the approach to the market on Thursday morning.
It comes after DataRoom revealed on Wednesday that the real estate investor was believed to be in the crosshairs of a suitor, with a party locking in offshore funding for a bid.
“The board wishes to advise securityholders that it has received a confidential non-binding indicative proposal from Gaw Capital Partners for 100 per cent of the issued stapled securities in National Storage REIT,” the company said in a statement to the market.
“Discussions are at this stage preliminary and subject to a number of conditions and there is no certainty that the discussions will lead to a final recommended offer.”
The board told shareholders to take no action.
Working for National Storage REIT is JPMorgan while Gaw Capital has tapped Goldman Sachs.
Analysts from Macquarie Group say they believe that National Storage REIT could cut costs which could lift earnings by about 15 per cent and predicts that the takeover bid could be worth about $2.21 per share, taking the company’s market value to $2.21.
This was the level that shares were trading at in National Storage on Thursday afternoon after they closed at $2.06 in the previous trading session.
For the 2019 financial year, National Storage REIT produced a $144.8m net profit and market analysts believe its platform remains valuable.
The company is Australasia’s largest self-storage owner-operator, with more than 60,000 residential and commercial customers at more than 170 storage centres across Australia and New Zealand.
Globally, the demand for self-storage is expanding, at a time when its yields are seen to be reasonably high in a low-yield environment.
It comes as many bet that the real estate space is ripe for deal activity this year, with the cost of acquiring an entire real estate company in many cases currently cheaper than buying the assets individually.
Gaw Capital Partners is based in Hong Kong and manages $US8bn of property investments.
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