National Storage confirms Warburg Pincus bid

The takeover battle for National Storage REIT has taken on a new twist.

National Storage's Gold Coast facility at 116 Spencer Rd, Carrara. Picture: Supplied

The takeover battle for National Storage REIT has taken on a new twist with the self-storage company saying it has received a bid from private equity house Warburg Pincus that was below a $1.9bn proposal made by US giant Public Storage.

The disclosure came after The Australian’s Data Room column reported that Warburg Pincus had tapped investment banks UBS and Credit Suisse for advice on a move on the country’s largest self-storage operation.

National Storage still appears likely to be taken over by US giant Public Storage, with shares in the target trust jumping to close to the bid price of its $1.9bn proposal.

The company has drawn global interest after rapidly expanding its property portfolio to about the $2bn mark as investors chase alternative assets.

National Storage told the ASX it had “previously received an unsolicited confidential non-binding indicative proposal from Warburg Pincus” at a cash price of $2.20 per share.

The Warburg Pincus indicative proposal was received prior to the company receiving Public Storage’s cash $2.40 per share bid that was made last Friday.

National Storage had not previously told investors about the bid but said that after “careful consideration” of the Warburg Pincus proposal it would give it “non-exclusive” due diligence to advance its proposal, which has customary take over conditions.

“Given the repeated press speculation regarding Warburg Pincus’ interest the NSR Board has determined to disclose its indicative proposal,” National Storage said.

Warburg Pincus is still conducting its due diligence including review of confidential information and is in discussions with the National Storage and the target’s advisers, JPMorgan, about the proposal.

National Storage also received a proposal from Hong Kong’s Gaw Capital Partners and the company said talks were ongoing about this proposal.

The target company for the first time said this bid was also made at $2.20 per share. Gaw is also undertaking due diligence.

National Storage said it was working with the three parties, saying discussions with each were preliminary.