Public Storage cooling on bid for Abacus Storage King

An Abacus Storage King asset in Robina

A buyout of Abacus Storage King by billionaire suitor Nathan Kirsh and bidding partner Public Storage is looking increasingly unlikely after rival National Storage further lifted its stake in the company.

An ASX filing ahead of the weekend showed that National Storage had increased its stake to 9.51 per cent in Abacus Storage King from 8.3 per cent in recent days after lifting its holding in June from 7.17 per cent, a jump from when it first emerged on the register with about 5 per cent.

The expectation has been that the Australian-listed National Storage will block attempts by Public Storage to enter the Australian market through the acquisition of its competitor and vote against its buyout plan.

Now some are saying Public Storage has lost interest and will not sweeten the deal to gain control of its target.

Abacus Storage King was previously thought to be a buyer of National Storage itself after it purchased shares in its business and Public Storage has bid for National Storage in the past as well.

There had earlier been a view that National Storage may accept a deal if Public Storage and Mr Kirsh’s Ki Group lifted the price.

Mr Kirsh’s Ki Group owns 49.99 per cent of Abacus Group which manages Abacus Storage King and owns about 19.9 per cent of the fund.

Ki Group also owns almost 40 per cent of Abacus Storage King directly.

Abacus Storage King rejected Public Storage and Mr Kirsh’s $1.93bn offer earlier in the year, saying it undervalued the company. Minority shareholders had also deemed the price opportunistic at a time that the industry is in favour for investors and private equity firms.

Abacus Storage said the $1.47 a share price did not reflect fair value, as it announced a pro forma net tangible asset figure of $1.73 based on an independent valuation review.

Abacus Storage King was a result of a demerger out of Abacus Group in 2023, but the Kirsh Group said in a letter on the ASX when it made its play with Public Storage that since the de-stapling, it had “significantly underperformed its peers”.

The challenge for the demerger was that the businesses lacked scale, which placed Abacus in a position where it was then not attracting passive index funds as investors, and there was more private capital available in the private markets to fund development growth.

Public Storage previously came for Storage King’s rival, Nat­ional Storage REIT, in 2020, but it pulled away at the onset of the global pandemic in 2020.

Shares in Abacus Storage King closed on Friday at $1.48.