Etude Storage Partners Makes proposal to acquire Global Self Storage

Etude Storage Partners LLC, a self-storage investment firm, has made a proposal to acquire Global Self Storage, Inc, a self-managed REIT that owns, operates, manages, acquires, and redevelops self-storage properties. The offer, $6.15 per share in cash (a 47% premium to Monday’s closing price of $4.17) represents a total deal value of almost $70 million.

Etude has made two previous offers to acquire Global Self Storage since the beginning of 2024, both of which were rejected. This time, Etude is calling for their Board to enter into a confidentiality agreement and begin negotiations. If they do not, Etude could take its case directly to stockholders.

Etude Storage Partners was launched at the beginning of 2024 as a joint venture between Steven Stein’s Etude Capital, one of the largest owners of self-storage facilities in the United States, and San Felipe Financing LLC, a private real estate entity controlled by Richard D. Kinder. The joint venture has a $250 million equity commitment from San Felipe Financing.

The proposal, in its entirety, is below.

May 7, 2024

Global Self Storage, Inc.
3814 Route 44
Millbrook, New York 12545
Attn: Board of Directors

Dear Members of the Board:

I am writing to you on behalf of Etude Storage Partners LLC (together with its affiliates, “ESP”, “we” or “our”). We have been stockholders of Global Self Storage, Inc. (“SELF” or the “Company”) for over five years. As you are aware, we have previously submitted two separate proposals to acquire all of the outstanding shares of common stock (the “Common Stock”) of the Company, initially at a price equal to $5.52 per share in cash, on February 15, 2024, which we then raised to $6.05 per share in cash on April 5, 2024. However, the Board of Directors of the Company (the “Board”) has summarily rejected both of these bona fide acquisition proposals and has refused to engage with us. As we believe that the Company’s stockholders would widely support our efforts, we now intend to make public our latest proposal: to acquire 100% of the outstanding shares of Common Stock of SELF at a price equal to $6.15 per share in cash (the “Transaction”). We are making our latest proposal public in the hopes of facilitating constructive discussions with the Board, with the goal of entering into a mutually agreeable transaction that is in the best interests of all stockholders.

We believe that our proposal delivers an attractive opportunity for stockholders to obtain full and fair value that exceeds both SELF’s historical share price levels, as well as the value the Company can be expected to deliver to stockholders in the coming years. For stockholders, our proposal represents a 47% premium over yesterday’s closing price of $4.17 per share and a 45% premium over the 30-day volume-weighted average price of $4.24.

About ESP and its Track Record of Success

ESP is a joint venture between entities controlled by Steven Stein and Richard D. Kinder. Our affiliates own over 1.8 million square feet of self-storage and insure over 1,700 facilities nationwide. We have extensive experience investing in and operating commercial real estate portfolios of scale. Combining our self-storage expertise with $250 million of equity capital, ESP has the unique capability to transact on large portfolios quickly and without financing contingencies.

We believe that the Company’s performance could be optimized under private ownership by an investor that has the economies of scale required for the Company to build a more long-term oriented business outside of the public markets. Given our deep experience in the self-storage industry and our financial resources, we possess the speed and execution strength needed to consummate the Transaction in an expedited and efficient manner. Accordingly, we believe a sale of the Company would be the best course to allow stockholders to realize immediate liquidity and maximum value for their shares.

Additional Proposal Details

As referenced above, we have more than sufficient available equity capital to fully fund the Transaction; accordingly, the Transaction would not be subject to any financing contingency.

We propose that the Transaction be accomplished through a negotiated merger agreement. Our non-binding proposal is subject to the following conditions: (i) receipt of required Board and stockholder approvals; (ii) receipt of any required governmental and third-party approvals; (iii) satisfactory completion of due diligence; (iv) the Company’s continued maintenance of its current operations without any material and adverse changes; and (v) the execution of a definitive agreement containing terms and conditions customary for a transaction of this type and size.

We are prepared to enter into an appropriate confidentiality agreement and commence our due diligence immediately. We are confident in our ability, together with our legal advisors, Olshan Frome Wolosky LLP, to complete our due diligence, negotiate and enter into binding agreements, and consummate the Transaction on an accelerated time frame.

Our proposal is based entirely on publicly available information. If upon further due diligence, we learn information regarding the business and its prospects that evidences additional value, we are prepared to increase our proposed acquisition price to reflect this new information.

Next Steps

We believe it is incumbent on the Board, in the proper exercise of its fiduciary duties, to meet with us as soon as possible to discuss moving forward with the Transaction so that we can deliver value to all stockholders. We believe our proposal is value-maximizing, and we urge all constituencies who would benefit from the Transaction to make their views known and have their voices heard by the Board.

We look forward to working with the Board to accomplish our proposed Transaction and promote the best interests of all Company stakeholders. However, we reserve the right to take any action that may be necessary to protect and maximize Company value, which may include, without limitation, taking our proposal directly to stockholders and seeking representation on the Board.

Steven Stein
President
Etude Storage Partners LLC