An activist hedge fund run by an Elliott Management alumnus has taken a significant stake in Big Yellow Group, adding pressure on the UK self-storage company to put itself up for sale. Irenic Capital Management has built a roughly 4 per cent holding and has been engaging with the London-listed group's board for months, arguing that its shares are undervalued and that it should explore a sale, according to people familiar with the matter.
Irenic's emergence on the shareholder register came in the same week that fellow activist Ancora Holdings disclosed its own 4 per cent stake. Shares in the FTSE 250 company have fallen 25 per cent over the past year amid a sluggish UK property market, though they jumped 5 per cent on Wednesday after Ancora went public, giving the company a market value of £1.65bn.
Big Yellow received takeover interest from private capital group Blackstone last October, but those talks collapsed. The company could draw interest from private equity groups as well as strategic buyers in a formal sale process. Ancora, known for campaigns at US rail operator Norfolk Southern and US Steel, also called for Big Yellow to explore strategic options, including a sale. In response, Big Yellow said last year's offer "was not at a level that reflected the full potential of the company", but added that it "continually evaluates all options for maximising shareholder value".
The move comes amid a wave of consolidation in the UK's listed real estate market, including Prologis's £14bn acquisition of Segro. Irenic, which had $2.5bn of assets under management at the start of this year, has previously pushed for the £506mn sale of The Restaurant Group to Apollo. Big Yellow's shares are trading near a six-year low despite solid annual results, with net asset value rising 1 per cent to £13.70 a share.
Source: Financial Times Companies · Summarized by HeadlinesBriefing