Public Storage Buying Shurgard

Public Storage, a Glendale, Calif.-based real estate investment trust, is acquiring Seattle-based Shurgard Storage Centers, another self-storage REIT, for about $5 billion.Public Storage is issuing about 38.4 million shares of common stock to fund the merger and assuming about $1.8 billion of Shurgard debt, Public Storage said. In addition, $136 million of Shurgard preferred stock will be redeemed. The REITs said they expect to benefit from economies of scale following the merger. Each Shurgard common share will be exchanged for 0.82 of a share of Public Storage common stock, which values each Shurgard common share at $65.16, Public Storage said. Public Storage had made a previous bid for Shurgard last summer, in which 0.80 of a share of Public Storage were offered for each Shurgard share, which Shurgard rejected at the time. On March 6, Shurgard common shares closed at $63.60 and Public Storage common shares at $79.46. After the merger, Public Storage is expected to have a total market capitalization of about $18 billion and an interest in over 2,100 facilities in 38 states and seven European countries. It can be found online at http://www.publicstorage.com.