Abacus Storage rejects takeover offer; cites $1.73/sh value on review

Abacus Storage King (ASX:ASK) has turned down a takeover offer from a consortium consisting of South African billionaire headed Ki Corporation and NYSE-listed Public Storage for $1.47/sh.

In turn, the company has also declined to hand over documents to the consortium allowing it to carry out due diligence.

This, Abacus wrote on Tuesday, doesn’t offer a fair valuation of the company despite being at a premium to prior trading prices. Perhaps this is informed by the fact the share price currently sits just above at $1.50/sh.

Also helping matters, for Abacus, is that it has announced a new number on Tuesday: a value of $1.73/sh, based on an “independent valuation review.”

“Importantly these valuations are undertaken on a standalone basis and do not capture any portfolio premium to reflect the scale and significance of ASK’s portfolio,” Abacus wrote on Tuesday.

“The [Independent Board Committee], in assessing value, has also had regard to factors including potential development profits, brand and platform value and corporate costs.”

In between the lines?: Abacus wants more money.

Worth considering is that Ki Corporation is the corporate child of Nathan Kirsh, a South African billionaire who in April of this year had effectively eyed Abacus (alongside NYSE-listed Public Storage) at just short of A$2B.

But what’s another hundred million to a billionaire?

To that end, perhaps, Abacus also highlighted on Tuesday that the consortium’s demands it has tax rulings from the ATO sorted ahead of the takeover going ahead “add timing risk and completion risk” to the deal. At $1.43/sh, Abacus wrote, those risks aren’t being compensated.

Presumably, they’re talking about the cost of taking the ATO to court.

ASK last traded at $1.50/sh.

Join the discussion: See what HotCopper users are saying about ASK and be part of the conversations that move the markets.