Abacus Storage (ASK AU): Time To Get Some Exposure?

• On the 7th April, the Ki Corporation/Public Storage (PSA US) consortium announced a NBIO, by way of a Scheme, for shares not held in Abacus Storage (ASK AU) at A$1.47/security.

• ASK rejected the Offer on the 13th May. The Kirsh-led consortium bumped non-binding terms 14.7% to A$1.65/share on the 14th July, and was granted six weeks of due diligence.

• DD expires on or around the 1st September. Nathan Kirsh directly/indirectly holds a 59.47% stake in ASK. Currently trading at a 7.5% spread to the indicative terms.

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Some Background - The Demerger

• Back on the 16th Feb 2023, Abacus Group (ABG AU) proposed the demerger of Abacus Storage King (ASK AU).

  • Existing ABG investors were offered shares as a one-for-5.6 rights issue; and new-money backers/investors bid into the book build.

  • The investor presentation deck is here.

  • ASK was priced at A$1.41/security, a 10.2% discount to the underlying asset of A$1.57/security.

    • At the time, key rival National Storage REIT (NSR AU) was trading at 0.8% discount to its December 31 2022 asset value. NSR typically traded at a premium to its net tangible assets.

  • ASK commenced trading on the 1st August 2023.

• Post-demerger, ABG became the fund manager of ASK and held a 19.9% stake.

  • South African billionaire Nathan Kirsh is the majority shareholder of ABG; plus held a direct stake of 39.62% (via Ki Corporation) - or a combined indirect/direct stake of 59.47%.