Life Storage rejects hostile takeover bid from Public Storage

The Amherst-based self storage company rejected the takeover bid on Thursday, saying it significantly undervalues its business and discounts its prospects to grow even further.

“The proposal is not in the best interests of shareholders,” said Mark Barberio, Life Storage’s non-executive chairman. “The board believes Life Storage will deliver greater risk-adjusted total shareholder returns as a standalone company than through the proposed transaction.”

Life Storage, in a statement, said it believes the Public Storage bid, disclosed on Feb. 5 after a similar offer made privately late last year also was rejected, “significantly undervalues” the company at a time when its executives believe it is poised to increase its earnings faster than its suitor.

“Life Storage believes the proposed transaction is an opportunistically timed attempt to transfer Life Storage’s upside potential to Public Storage’s shareholders,” the statement said.

The rejection does not mean the takeover fight is over. Public Storage could increase its offer, or another suitor could step in with its own bid.

The takeover bid, if successful, would further pare the already small ranks of publicly traded companies based in the Buffalo Niagara region. Columbus McKinnon, a materials handling equipment maker long based in Amherst, said last year that it would move its corporate headquarters to North Carolina, leaving the region with 18 publicly traded companies based here.

The bid by Public Storage, if successful, would make the nation’s largest public storage company even bigger and bring more consolidation to a highly fragmented market that is dominated by mom-and-pop operators and regional players in a field that has relatively low barriers to entry and requires little technical expertise.

The bid by Public Storage to acquire Life Storage would give the California-based company more than 14% of the…