Activist investor Ancora Holdings Group is pressing British self-storage operator Big Yellow Group (BYG) to consider a sale, saying the company’s shares are deeply undervalued and that a buyer could unlock significant value for shareholders.
“We believe a sale of the entire company is the best risk-adjusted outcome for shareholders and urge BYG to initiate a review of strategic alternatives,” said James Chadwick, president of Ancora Alternatives LLC, on Tuesday during a presentation given at the Sohn San Francisco Investment Conference.
“Our due diligence suggests there are financial and strategic parties globally who would be interested in acquiring the company given the scarcity value of its premium London-based portfolio,” according to the activist investor.
Cleveland-based Ancora, which owns more than 4 percent of BYG, wants the company’s board to launch a comprehensive strategic review, including a formal sale process to attract interest from potential corporate and financial buyers worldwide.
During the presentation released Oct. 13, Chadwick said Ancora estimated BYG’s intrinsic value at £12.36 per share, equivalent to about $16.60 (USD), based on a capitalization rate of 5.1 percent.
The estimate implies substantial potential upside from the company’s current share price, according to Ancora, which added that the actual value of any transaction would depend on market conditions and buyer interest.
Ancora also said that BYG’s market valuation fails to reflect the strength of its underlying business, particularly its concentration of self-storage properties in London.
Specifically, the investor estimates that 70 percent to 75 percent of the company’s earnings before interest, taxes, depreciation and amortization come from London-based stores.
BYG owns a portfolio that is 99 percent freehold, according to Ancora, giving it long-term ownership of properties in a market where suitable sites are difficult to replace.
“This deep value opportunity offers multiple paths to upside, including a sale of the company at a significant premium to the current stock price,” said Chadwick during the presentation, noting that BYG could charge higher rents and benefit from expected growth in self-storage demand.
Despite such strengths, Ancora says BYG is trading at a steep discount to the value of its underlying assets and estimates that the shares trade at a discount to net asset value of nearly 40 percent, with a potential upside of at least 54 percent.
The investor also says BYG trades at 14.6 times forecast earnings before interest, taxes, depreciation and amortization, compared with its historical average of 21.1 times, representing a discount of roughly 31 percent — the lowest valuation in the company’s 26-year history as a publicly traded business, Ancora said.
Ancora blames the weak valuation partly on sluggish economic growth in the United Kingdom, a struggling domestic housing market, a failed proposed take-private transaction by Blackstone in 2025, and the capital needed to develop BYG’s property pipeline.
Yet, Ancora said that despite the failed Blackstone deal, “buyer appetite remains strong.”
In fact, based on its due diligence, Ancora said a formal strategic review would allow BYG to test its market value against recent private-market transactions.
In addition to a potential sale, Ancora said the board should take steps that also could improve shareholder returns, such as selling non-core assets, rebranding or selling its smaller Armadillo self-storage business, making better use of its property portfolio, monetizing its development pipeline, and buying back shares that Ancora considers undervalued.
“These actions, combined with a likely recovery in occupancy and the possibility of an improved U.K./London economic environment, could cause Big Yellow’s shares to materially re-rate from trough levels,” Ancora said in a statement.
Chadwick said Ancora plans to “engage constructively” with BYG to pursue what it sees as the full value of the business. Potential strategic or financial suitors Ancora mentioned include companies like Extra Space Storage, Heitman, Public Storage, and KKR.
Ancora’s campaign puts pressure on BYG’s board to demonstrate why the company should remain independent rather than pursue a sale.
At press time, the company hadn’t yet publicly responded to Ancora’s presentation.