Ancora calls on "materially undervalued" Big Yellow to consider sale
Ancora Holdings Group LLC on Tuesday called on Big Yellow Group PLC to launch a comprehensive strategic review, including a sale process.
In a statement, Cleveland, Ohio-based wealth management and advisory firm Ancora said it believes that a sale of Big Yellow represents the best risk-adjusted outcome for shareholders.
On Tuesday, Ancora said it has taken a more than 4% stake in Bagshot, England-based self-storage facility operator, Big Yellow. The investment was presented by James Chadwick, president of Ancora Alternatives LLC, at the 17th Annual Sohn San Francisco Investment Conference.
Ancora said it plans to engage constructively with Big Yellow to deliver full value for shareholders.
In addition to considering a sale, Ancora said that with shares at a five-year low, Big Yellow can take "pragmatic value-enhancing actions such as divesting non-core assets, rebranding or selling Armadillo and monetizing the property development pipeline."
"These actions, combined with a likely recovery in occupancy and the possibility of an improved UK/London economic environment, could cause Big Yellow's shares to materially re-rate from trough levels," Ancora said.
Ancora said Big Yellow is "materially undervalued" due to slow UK economic growth, a weak domestic housing market, Big Yellow's failed take-private in 2025 and its capital-intensive yet high-potential property development pipeline.
It feels that Big Yellow currently trades at an unwarranted discount to net asset value of almost 40% with an estimated upside of at least 54%. Ancora pointed out Big Yellow shares currently trade for the cheapest valuation in its 26-year publicly traded history.
Ancora estimates that the intrinsic value of Big Yellow is 1,236.00 pence per share. On Tuesday, Big Yellow closed down 0.3% at 799.00p in London for a market value of £1.57 billion.
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