This agreement has Extra Space Storage exchanging its own shares for shares of LifeStorage stock. This will have holders of LSI stock receive 0.895 shares of EXR stock for each share that they own. The deal is set to close in the second half of 2023.
Putting a financial number to that offering, LSI is valued at $145.82 per share based on the closing price of EXR stock on March 31. This has the deal representing a roughly 11.2% premium to LSI stock’s Friday closing price.
When the deal goes through, holders of LSI stock will own 35% of the combined company. The remaining 65% will belong to current shareholders of EXR stock. Also, the combined company will have a pro forma equity market capitalization of approximately $36 billion.
Joseph Saffire, CEO of Life Storage, said the following about the deal:
“Following a deliberate and comprehensive review, the Life Storage Board unanimously concluded that the pending transaction with Extra Space maximizes value today and is the transaction most likely to deliver superior long-term returns for our shareholders.”
What This Means for LSI Stock
Shares of LSI stock would no longer trade after the company combined with Extra Space Storage. However, the value the deal brings has investors excited today. This has some 4 million shares of LSI trading today. Its daily average trading volume is about 1.1 million shares.
LSI stock is up 2.2% as of Monday morning.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.