Public Storage buys Shurgard

The Boards of Directors of both companies approved a definitive merger agreement under which Public Storage will acquire Shurgard at a total transaction value of approximately $5.0 billion. Under the transaction, which is taxable, Public Storage will issue approximately 38.4 million shares of common stock, will assume approximately $1.8 billion of Shurgard debt and $136 million of Shurgard preferred stock will be redeemed. The transaction is targeted to close by the end of the second quarter 2006.

Public Storage’s Merger Agreement with Shurgard: Share Exchange and Market Capitalization Growth

Under the terms of the merger agreement and upon close of the transaction, each share of Shurgard common stock will be exchanged for 0.82 shares of Public Storage common stock, representing a current value per Shurgard common share of $65.16 based on Public Storage’s close on Monday, March 6, 2006. This represents a 39% premium to Shurgard’s closing stock price on Friday, July 29, 2005, the last day prior to when Public Storage publicly announced its proposal to acquire Shurgard. Upon closing, Shurgard’s shareholders will own approximately 23% of the outstanding shares of the combined company.

The merger will enhance the size of the nation’s largest self-storage company with a combined total market capitalization of approximately $18 billion and with ownership interest in over 2,100 facilities in 38 states and seven European nations.

« The combination of Public Storage and Shurgard creates the largest self-storage company in the world, with significant operating platforms in both the United States and Europe, and enhances our prospects for continued growth and improved profitability, » said Ronald L. Havner, Jr., President and Chief Executive Officer of Public Storage. « We are pleased that Shurgard’s Board of Directors and management have recognized the compelling financial and strategic benefits of this transaction. This transaction provides Shurgard’s shareholders with a substantial premium for their shares and the opportunity to benefit from participation in the upside potential of the combined entity. We look forward to creating additional value for the shareholders of the combined company. »

David K. Grant, President and Chief Executive Officer of Shurgard, stated, « This merger represents a win-win situation for both Shurgard and Public Storage shareholders. A few months ago, we initiated a process to determine the best course of action for our Company. After reviewing a number of strategic alternatives, it is clear that this transaction is the best option to create long-term value for our shareholders. There are very few real estate asset classes that are as scalable as self-storage and none that benefits as much from economies of scale. Our combined employees represent the best and the brightest in the industry with deep experience in every aspect of the business in eight different countries. So there is a huge opportunity for these two groups of employees to benefit from each other’s experience and ideas. »

Given the geographic overlap of the Public Storage and Shurgard portfolios, economies of scale are expected in media. Other savings are expected to be achieved by reducing duplicate expenses for Yellow Pages and other advertising, management information systems and other back-office functions.

Public Storage will retain its headquarters in Glendale, California. Dave Grant will remain with the Company at least through the close of the transaction. An independent member of Shurgard’s Board of Directors will join the Public Storage Board of Directors upon closing.

The transaction is subject to customary closing conditions and regulatory approvals and the majority approval of both companies’ shareholders. Members of the Hughes family, who collectively own approximately 36% of Public Storage’s outstanding shares, have agreed to vote their shares in favor of the transaction. Similarly, Charles K. Barbo, Chairman of Shurgard, has agreed to vote his shares in favor of the transaction.

In connection with the transaction, Goldman Sachs is serving as exclusive financial advisor to Public Storage, and Wachtell, Lipton, Rosen & Katz is serving as its legal counsel. Citigroup Corporate and Investment Banking and Banc of America Securities LLC are serving as financial advisors to Shurgard, and Willkie Farr & Gallagher LLP and Perkins Coie LLP are serving as its legal counsel.

[b]Analyst/Investor Conference Call and Web Cast[/b]

A conference call has been scheduled for Tuesday, March 7, 2006, at 8:00 a.m. (PST) to discuss the merger. The participant toll free number is (877) 368-5103 (conference ID number 6282604). A simultaneous audio web cast may be accessed by using the link at under « Corporate Information, Investor Relations. » A replay of the conference call may be accessed through March 13, 2006 by calling (800) 642-1687 or by using the aforementioned web link. Both forms of replay utilize conference ID number 6282604.

About Public Storage, Inc.

Public Storage, Inc., an S&P 500 company, is a fully integrated, self-administered and self-managed real estate investment trust that primarily acquires, develops, owns and operates self-storage facilities. The Company’s headquarters are located in Glendale, California. The Company’s self-storage properties are located in 37 states. At December 31, 2005, the Company had interests in 1,501 storage facilities with approximately 92 million net rentable square feet.

Additional information about Public Storage, Inc. is available on its website,

About Shurgard Storage Centers, Inc

Shurgard Storage Centers, Inc. is a real estate investment trust headquartered in Seattle, Washington. Shurgard specializes in all aspects of the self-storage industry and operates a network of over 644 operating storage centers located throughout the United States and in Europe.