National Storage REIT (ASX: NSR) Agrees to $4bn Takeover- Should You Accept $2.86 or Wait for a Better Offer?

National Storage REIT (ASX: NSR) surged to a record high this week after agreeing to an A$4 billion takeover from Brookfield and Singapore sovereign wealth fund GIC. The buyers are offering A$2.86 in cash for each security, which values the company, the biggest self-storage operator in Australia and New Zealand, at A$6.7 billion including debt. For investors who have held the stock for a long time, this deal gives them a clean and profitable exit. But the big question is, is this offer really good enough?

The NSR board has fully supported the deal, as long as no better offer shows up. The offer gives a 26.5% premium over the earlier share price of A$2.26, which sounds very attractive. However, a closer look suggests the offer may undervalue the company, meaning shareholders could be accepting less than its true worth.

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The Premium Looks Modest When You Dig Deeper

On the surface, a 26.5% premium to the pre-bid share price of A$2.26 sounds generous. But there’s another way to look at this deal that tells a different story.

The offer sits just 10.9% above National Storage’s net tangible asset value of A$2.58. That’s the book value of what the company actually owns. When you compare this to similar takeovers over the past decade, it looks light. Australian REIT buyouts have typically paid around 18% above NTA. Using that benchmark, a fairer price would be closer to A$3.04.

Why does this matter? Because self-storage is an attractive business. Rental income tends to rise with inflation, maintenance costs are low, and demand stays steady even in tough economic times. National Storage operates over 290 centres across Australia and New Zealand, making it the clear market leader. Brookfield and GIC wouldn’t be paying A$4 billion unless they saw plenty of upside ahead. The question is whether shareholders are getting their fair share of that future value.

Why a Rival Bid Seems Unlikely

It’s unlikely that another buyer will step in with a higher offer, even though it’s possible in theory. GIC already has a strong partnership with National Storage through a joint venture worth A$270 million, which gives it detailed knowledge of the company’s properties, operations, and future growth plans. Any rival bidder would lack this inside view, making it harder to justify paying more.

This close relationship is likely why the board accepted a lower premium than usual, since there isn’t much competitive pressure. The offer price of A$2.86 also includes a dividend of A$0.06, meaning shareholders will actually receive A$2.80 in cash from the buyers, with the rest paid separately as a dividend.

The Investor’s Takeaway

For National Storage shareholders, the choice is between taking a sure deal or hoping for more. The stock is already close to the offer price at A$2.81, leaving only about 2% upside. If the deal fails, shares could drop back near A$2.26, which would mean a steep 20% fall.

We believe the offer is fair but not generous. One analyst said it passes the “sniff test” because of the deal’s size and the lack of serious rivals. For most shareholders, it makes sense to accept. But for new buyers hoping to profit from the deal, the numbers don’t add up, the gap is too small, and if the deal falls through, the losses could be heavy.

The scheme vote is expected in April 2026, with completion targeted for the second quarter. Shareholders should keep an eye out for the independent expert’s report, which will give a formal verdict on whether the price is fair.