Activist Investor Urges Self-Storage Firm Big Yellow to Consider Sale
Ohio-based Ancora Holdings, holding a 4% stake, suggests a sale offers the best risk-adjusted outcome for shareholders amid falling share prices.
US activist investor Ancora Holdings has called for self-storage firm Big Yellow Group to explore a sale, stating it would be the optimal outcome for shareholders. The Ohio-based firm, which owns a 4% stake in Big Yellow, believes the company's shares are trading at an "unwarranted discount" to their net asset value.
Big Yellow Group's stock has fallen to multi-year lows this year, impacted by a cooling housing market and sluggish economic growth that has affected demand for storage services. Ancora estimates the company's shares, currently trading around £8.42, should be valued at £12.36.
This development follows the collapse of a potential sale of Big Yellow to private equity firm Blackstone nearly a year ago. Ancora noted that Blackstone had previously offered a price 50% above the current share value and suggested that Big Yellow could attract a higher offer now.
Ancora described Big Yellow as an "attractive asset" due to its comparative affordability against US storage real estate investment trusts (REITs) and the scarcity value of its UK property portfolio. The firm also proposed other value-enhancing actions, including divesting non-core assets, rebranding or selling its Armadillo division—which operates smaller storage facilities in the Midlands and North of England—and monetizing its property development pipeline.
"These actions, combined with a likely recovery in occupancy and the possibility of an improved UK/London economic environment, could cause Big Yellow's shares to materially re-rate from trough levels," Ancora stated.
London-listed companies are increasingly becoming targets for activist investors advocating for sales or takeovers, as merger and acquisition activity sees a resurgence. Investment trusts have been particularly scrutinized, with Saba Capital actively targeting those trading at significant discounts. Other consumer-focused companies, such as Premier Inn owner Whitbread and retailer The Works, are also navigating disputes with activist investors over board representation.