Big Yellow has told shareholders it is keeping “all options” under review after the self-storage firm’s biggest investor told it to put itself up for sale.
The FTSE 250 group said it “recently” met with a shareholder who “is encouraging Big Yellow to explore a sale”.
Earlier this week, Ancora Alternatives, an Ohio-based activist investor, told the storage firm that it is “full of trapped value,” adding that a sale would be the “best risk-adjusted outcome for shareholders”.
The investment firm told Big Yellow that there are a number of potential buyers who would jump at the chance to buy its “premium London-based” property estate.
The self-storage group responded on Thursday, telling investors: “The Board and management team continue to focus on executing the company’s clear and proven strategy.
“The board is also cognisant of its fiduciary duties and continually evaluates all options for maximising shareholder value.”
Shares in Big Yellow rose by more than two per cent on Thursday after the group suggested it is looking at all options. The stock had already gained as much as seven per cent on Wednesday following Ancora’s intervention.
Investors ‘losing patience’
In December, Big Yellow ended talks with private equity giant Blackstone because the price they were offering was too low.
Analysts at AJ Bell said it is “no wonder that shareholders are losing patience” with the storage firm, which has lost 42 per cent of its market value in the last five years.
Though Big Yellow’s shares rose to 858p on Thursday this remains well below the 1,236p per share intrinsic value which Ancora believes the group has.
“Activist investors often do a lot of their negotiations behind closed doors. They typically only go public with demands if the door has been shut in their face or not even opened in the first place,” analysts at AJ Bell said.
“Ancora is now going big with its demands in public, with a dedicated website and an appearance on the public stage at an investment conference. That suggests it is going to bang the drum and try to get support from other shareholders to force Big Yellow to do something.”