Australia's Abacus Storage King gets $1.42 billion sweetened offer, shares jump
- Shares rise over 7%, hit highest since June 23
- Consortium gets six weeks of due diligence time
- ASK shareholders should accept offer - JPMorgan analyst
Australia's Abacus Storage King 
ASK said on Monday it received a sweetened takeover offer from a consortium comprising a South African billionaire, valuing the firm at A$2.17 billion ($1.42 billion) and sending its shares soaring over 7%.
The consortium, which comprises businessman Nathan Kirsh's family office Ki Corp and U.S.-based Public Storage 
PSA, raised its bid to A$1.65 per share for the Australian self-storage firm.
The revised price represents a roughly 15% premium to the initial offer excluding shareholder distribution. Abacus Storage shares rose as much as 7.1% to a three-week high of A$1.580, but remained below the new offer price.
Ki Corp directly and indirectly controls 59.39% of Abacus Storage. If a deal materialises, Ki Corp and Public Storage would own 50% each in the firm.
Abacus Storage in May rejected the group's earlier offer, citing risks surrounding valuation, timing and deal completion. An independent review undertaken by the firm pegged its portfolio value at A$1.73 per share.
Abacus Storage's independent board committee has granted a six-week due diligence period to the consortium to see if a binding deal could be agreed upon.
"Abacus Storage King shareholders should accept the deal," said Solomon Zhang, an equity research associate at J.P. Morgan.
"They could try squeeze another 5 cents (AU) out of it but just need to be cautious of scuttling the deal entirely."
Zhang pointed that PSA is a "fairly disciplined acquirer" and typically prefers targets with a higher implied rate of return than its own.
Given PSA's implied rate of return is higher than ASK's, "we don't think PSA would be willing to revise the bid higher in the absence of a material re-rate in PSA's own share price", Zhang said.
In 2023, PSA walked away from an $11 billion deal to acquire self-storage properties operator Life Storage after failing to woo the shareholders which later accepted a $12.7 billion offer from real estate investment trust Extra Space Storage.
($1 = 1.5239 Australian dollars)
