US private equity giant Blackstone plots swoop on London-listed storage firm Big Yellow

Big Yellow could become the latest UK firm to fall prey to US private equity after buy-out giant Blackstone revealed it was eyeing a swoop.

Shares in the London-listed storage firm – valued at £1.9billion prior to yesterday’s disclosure – surged 15.4 per cent, though Blackstone cautioned that tax changes in the Budget could affect its decision to pounce.

The US giant, which is the world’s largest commercial property investor, earlier this year snapped up logistics specialist Warehouse REIT for £489million after winning a bidding war with UK-listed real estate group Tritax Big Box.

Separately, Blackstone yesterday disclosed a complex deal with Tritax. It will see Blackstone take a 9 per cent stake in the UK group, making it the second-largest shareholder.  It is also selling £1billion worth of logistics assets to Tritax.

Blackstone, led by Wall Street veteran Stephen Schwarzman, has become a major player in logistics in Europe as a boom in internet shopping boosts demand for warehouses. 

Big Yellow, founded in 1998, operates across more than 100 locations. Its customers often use its storage facilities when moving home.

Target: Big Yellow, founded in 1998, operates across more than 100 locations. Its customers often use its storage facilities when moving home

Blackstone said it was considering a cash offer for the company but cautioned that its ‘evaluation is at a preliminary stage’. 

It said it was ‘considering, among other factors, the macro-economic environment including the potential impact of the upcoming Budget as it relates to the self-storage sector’.

Under takeover rules, Blackstone has until November 10 to make a firm offer for the company or announce that it does not intend to do so.

Big Yellow confirmed it has ‘held meetings with a small number of parties in relation to a range of potential options including a potential sale of the company’ – but said it has not received a takeover approach and was not in discussions over a sale.

Russ Mould, of broker AJ Bell, said: ‘A lot is riding on the Budget as to whether Blackstone will make a formal bid, but throwing its hat into the ring now means it can act fast should [Chancellor] Rachel Reeves not announce anything that dampens the appeal of the sector.’

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