Shurgard Europe, a unit of Public Storage Inc., is offering 43.6 million new shares at 12.50 euros to 15 euros each, the Guernsey-based company said in a statement today. An additional 6.54 million shares will be made available to investors if there is sufficient demand. The offering will value Shurgard Europe at as much as 1.4 billion euros.
Public Storage, based in Glendale, California, is the largest owner and operator of self-storage centers in the U.S. The company will own almost 52 percent of Shurgard after the share sale, according to today’s statement. That stake would fall to 44 percent if investors buy additional shares.
Shurgard will use 50 million euros of the proceeds from the public offering to fund developments and 124 million euros to repay money owed to Public Storage. Public Storage will receive the remainder of the money and as much as an additional 98.1 million euros if the over-allotment option is exercised in full.
Shurgard owns 167 self-storage centers in seven European countries and plans to develop another 16. The centers have 87,000 customers using 812,000 square meters (8.7 million square feet) of space. The company generated rental income of 129.9 million euros in 2006 and reported a net loss of 3.3 million euros.
Merrill Lynch & Co. and Morgan Stanley are managing the share sale. The offer will close on June 20 and the shares are scheduled to start trading in Brussels on June 22. Individual Belgian investors will be offered about 10 percent of the shares in the public offering.