Paul Singer’s Elliott Management Corp. has privately nominated a minority slate of six dissident director candidates for the 13-person board of REIT Public Storage (PSA), according to a person familiar with the situation.
The insurgent manager, who rarely launches director fights lately, has also accumulated a substantial stake and has been in talks with the self-storage company about changes it is seeking at the company, the person noted.
Seeking to bolster its position Public Storage announced Sunday it was installing three new directors, known as trustees, to its board including: Shanka Mitra, the CEO if fellow REIT Welltower Inc. (WELL); former Equity Residential CEO David Neithercut and Paul Williams, president of the National Association of Corporate Directors Chicago chapter.
Welltower installed Mitra in the CEO position in October. Elliott had reported a 1% stake in Welltower in the second quarter of 2020, but cut it down to 0.1% in the third quarter.
In addition to installing three new directors, Public Storage also announced Sunday three trustees — Uri Harkham, Wayne Hughes, and Daniel Staton — would resign from the board on Dec. 31.
Public Storage shares spiked 4% Monday morning to $228.22 per share.
The three soon-to-be-removed directors appeared overtenured by most governance standards. According to relationship mapping service BoardEx, a sister company of The Deal, Harkman, 72, Hughes, 61, and Staton, 67, have served on Public Storage’s board for 28, 23 and 22 years, respectively — longer than any other incumbent director.
In a statement, Public Storage said it has had “constructive discussions” with Elliott in recent weeks. The nomination deadline for directors at Public Storage’s 2021 annual meeting expected in April was Dec. 13.
Public Storage, based in Glendale Calif., has a $38 billion market capitalization.
As of Sept. 30, it had interests in 2,504 self-storage facilities in 38 states with about 171 million net rentable square feet. In addition, it owned a 35% stake European self-storage company Shugard Self Stage SA and a 42% position in PS Business Parks Inc. (PSB).
Elliott has not launched many director fights of recent. In 2017 the fund succeeded in installing three dissident directors onto the board of Arconic Inc. (ARNC) following a proxy contest that went the distance. In 2018, Elliott won control of Telecom Italia SpA’s board, concluding a bitter fight that installed a dissident, 10-director slate onto the large communications company’s board.
The Wall Street Journal first reported Elliott’s position in Public Storage.