Shurgard Model Update, short term pain for long term gain

The LnS acquisition scheme became effective on 1/8/24. We adjust our model to reflect the acquisition costs. This is not new information. The transaction costs, bridge loan and integration efforts weigh down our previous EPS estimates for FY24-26. The deal changed our perception of the company from a gentle developer/consolidator to an integrator for the next 12-18 months. However, we believe there is significant LT upside potential as Shurgard benefits from economies of scale on its platform and the deal accelerates the process in the UK. Hence, we keep our target at EUR 54. The market has become wary for a capital increase, but we believe that they can wait either for a share price recovery or replace the expensive bridge loan with other debt. The LTV% offers enough headroom (35% max). Shurgard also raised 300m in October '23 as buffer for acquisitions. (1H24: 14/8/24)