Second activist pushes for sale of UK self-storage company Big Yellow
Irenic Capital takes 4% stake in FTSE 250 real estate group and joins Ancora in lobbying for a sale
An activist hedge fund run by an Elliott Management alumnus has taken a significant stake in Big Yellow Group, heaping more pressure on the UK self-storage company to put itself up for sale.
Irenic Capital Management, which has built a roughly 4 per cent holding in Big Yellow, has been engaging with the London-listed group’s board of directors for months, arguing that its shares are undervalued and it should explore a sale, according to people familiar with the matter.
Irenic’s emergence on Big Yellow’s shareholder register comes in the same week that fellow activist investor Ancora Holdings disclosed a 4 per cent stake in the self-storage group.
Shares in the FTSE 250 company have fallen by 25 per cent over the past year amid a sluggish UK property market. The stock jumped 5 per cent on Wednesday after Ancora went public with its stake, giving it a market value of £1.65bn. The activists are now among Big Yellow’s largest shareholders.
Big Yellow received takeover interest in October last year from private capital group Blackstone but the talks eventually collapsed. The company could draw interest from private equity groups as well as strategic buyers in a formal sale process, the people said.
Ancora, which is best known for campaigns at US rail operator Norfolk Southern and US Steel, also called for Big Yellow to explore strategic options including a sale at an investor conference on Tuesday.
In response to Ancora’s demands, Big Yellow reaffirmed in a statement on Thursday that last year’s takeover offer “was not at a level that reflected the full potential of the company”. But the company added that it “continually evaluates all options for maximising shareholder value”.
A wave of consolidation has swept over the UK’s listed real estate market. Warehouse and data centre owner Segro is being acquired by larger US rival Prologis in a £14bn deal, while NHS landlord Assura is combining with rival Primary Health Properties in a £1.8bn deal.
Big Yellow did not immediately respond to a request for comment about Irenic’s stake. Irenic declined to comment.
Since being founded by former Elliott investor Adam Katz and Indaba Capital portfolio manager Andy Dodge in 2021, Irenic has been making a name for itself as one of the most successful nascent activists. It had $2.5bn of assets under management as of the start of this year.
Irenic has been active in the UK, previously successfully pushing for the £506mn sale of Wagamama owner The Restaurant Group to Apollo. It is also currently invested in Upper Crust owner SSP Group, which it has touted for sale to private equity groups, and in UK aerospace manufacturer Melrose Industries.
UK companies across sectors have been targeted in recent years by international buyers, attracted by relatively cheap valuations.
Big Yellow’s shares are trading near a six-year low, despite posting solid annual results earlier this year — with net asset value, an important metric for real estate landlords, rising by 1 per cent to £13.70 a share.