Lok'nStore bid heightens 'bargain basement' fears

ANOTHER major British company is set to be taken off London’s stock market in a foreign takeover deal struck today, highlighting worries across the City that low valuations are turning it into a global bargain basement.

- Michael Hunter

Lok’nStore became the latest target of a high-premium overseas buyout, in a bid from Brussels-listed rival Shurgard valuing the temporary storage firm’s stock at £378 million.

The 1110p per share offer came in 16% above yesterday’s closing price, even after a strong recent rally for the stock. The offer was almost 37% higher than the wider, three-month “volume-weighted” average price used by bankers to price deals.

It was high enough to secure backing from Lok’nStore’s board, while also playing into fears over the deepening trend for firms to leave London.

Tony Cross, at the City’s stock market database Investegate, said: “Lok’nStore is the latest in a line of London-listed companies to announce it can get better value for its shareholders by way of an acquisition. The fact such a success story is set to fall into the hands of foreign ownership does little to allay fears that the Great Fire Sale of London is anywhere near burning itself out.”