Public Storage has settled its dispute with Elliott Management, appointing two directors previously advanced by the activist and agreeing to establish an advisory long-term planning committee.
On Tuesday, Public Storage announced that it added Michelle Millstone-Shroff and Rebecca Owen to its board and appointed them to a newly created committee tasked with the company’s long-term planning, strategy, growth, capital allocation priorities, and capital structure management. The company also said Gary Pruitt has retired from the board.
These steps are the result of “substantive engagement” with Elliott, Public Storage said, adding that it has also struck a cooperation agreement and an information-sharing agreement with the activist.
Land and Buildings announced in a tweet that it had taken a position in Public Storage, lauding a changing of the guard and saying that the company has 40% upside.
Last month, Elliott launched a campaign at Public Storage to refresh the board with its own six-person slate, which included Millstone-Shroff and Owen. The activist said in a letter to the board that Public Storage has “dramatically underperformed” its peers over the last decade despite holding “the best assets and platform in the industry.”
Elliott asked Public Storage to refresh its board in a “substantial” manner, form a new committee to evaluate its performance and plan, and “restore its relationship with shareholders” by putting together a “robust investor presentation” to promote its business.
Public Storage, a real estate investment trust that doubles as a self-service storage company, countered Elliott’s narrative, citing a litany of metrics that pointed to the company’s growth.
As part of the settlement deal, Elliott has pulled its director nominees and pledged its shares in favor of the company’s slate, which will include Millstone-Shroff and Owen, for the 2021 annual meeting, the Tuesday statement from Public Storage reads. Elliott held about 2.2 million shares as of December 14.
“Public Storage has the best platform in the self-storage industry, and we share the board and management team’s conviction in the company’s ability to capitalize on its leading franchise,” said Elliott Portfolio Manager Johannes Weber. “We believe the changes announced today will position the company for significant growth,” he added.
Shares in Public Storage were down 0.6% after the first 10 minutes of trading on Tuesday. The company has a market value of $38.7 billion and last year the stock climbed 8%.