Elliott Seeks 6 Directors On Public Storage Board After Acquiring Substantial Stake

Activist hedge fund Elliott Management Corp. has acquired a significant stake in self-storage service provider Public Storage (NYSE: PSA), the Wall Street Journal reported Sunday — citing people familiar with the matter.

What Happened: Public Storage said in a statement the same day that it has appointed three new directors to its Board of Trustees. 

The Glendale, California-based company said it held "constructive discussions" with Eillott in the recent weeks and disclosed receiving six confidential recommendations for the election to the Public Storage Board of Trustees from Elliott before the Dec. 12 deadline for nominations.

The three new directors appointed by Public Storage include Shankh Mitra, David Neithercut, and Paul Williams.

Shankh Mitra is the CEO of the real estate investment trust Welltower Inc (NYSE: WELL). David Neithercut was the former President, CEO, and a current board member of the publicly-traded REIT Equity Residential (NYSE: EQR). Whereas, Paul Williams is the president of the Chicago chapter of the National Association of Corporate Directors.

The Public Storage board overall has a strength of 13, meaning the six appointments sought by Elliott would constitute a minority, the Journal noted.

Why Does It Matter: Current board members Uri P. Harkham, B. Wayne Hughes, Jr., and Daniel C. Staton will be retiring on Dec. 31.

The Journal reports that self-storage services company is witnessing increased competition from rivals Extra Space Storage Inc (NYSE: EXR) and Cubesmart (NYSE: CUBE). Towards the end of October, there were reports that Blackstone Group Inc’s (NYSE: BX) real estate division will acquire Brookfield Asset Management Inc (NYSE: BAM) owned Simply Self Storage for $1.2 billion.

It isn't immediately clear what changes Elliott is pushing for at the company to improve its market performance.

Price Action: PSA stock closed 1.61% higher at $220.06 on Friday.

Photo, courtesy of Public Storage