Blackstone sniffs around Big Yellow — what the 20% pop really prices in

• Blackstone is weighing a cash offer for Big Yellow; shares jumped ~20% on 13 October but still trade at ~0.89x EPRA NTA.

• FY25 numbers show a conservative balance sheet (c.13% LTV) and a London-heavy, high-rent estate — catnip for private capital.

• A “put up or shut up” deadline of 10 November comes before the UK Budget on 26 November — both are catalysts for the stock.

What happened

On 13 October 2025, the FT reported that Blackstone is in early-stage diligence on a possible cash bid for Big Yellow Group. Under the Takeover Code, it has until 10 November to announce a firm intention or walk away. The shares spiked to £11.54, their highest in a year.

Context & data

• FY25 revenue £204.5m (+2% YoY); store EBITDA £143.2m (flat). Occupancy closed at 78.7% (LFL 79.1%) with average net rent up 3% to £34.71/sq ft. Dividend up 3% to 46.4p.

• EPRA NTA: 1,296.9p per share (31 Mar 2025). On £11.54, the stock screens at ~0.89x NTA; adj. EPS 57.8p implies ~20x FY25 P/E.

• Balance sheet: net debt £389m; net debt/gross property assets 13%; interest cover 6.1x; net debt/EBITDA 3.1x.

• Footprint: 109 stores; ~75% of revenue from London/commuter belts; 14-site pipeline (~1.0m sq ft, ~16% of MLA).

• Read-across: two days earlier Blackstone agreed a £1.0bn UK logistics asset sale to Tritax Big Box in exchange for ~8.6–9% BBOX stake — signalling active UK real-assets rotation.

My take

At ~0.89x NTA and ~20x adj. EPS, the market is pricing in some bid probability but not a knockout premium. Big Yellow’s appeal is obvious to Blackstone: urban-centric, brand leader, mostly freehold estate with high barriers to entry; conservative 13% LTV offers headroom to lever and drive mid-teens IRRs without heroic assumptions. London weighting (c.75% of revenue) supports pricing power; rent growth stayed positive in FY25 despite softer occupancy.

The kicker is sector momentum and sponsor playbook. Blackstone has been consolidating UK/European sheds (Warehouse REIT, BBOX deal), and self-storage shares similar traits: low capex, short leases, dynamic pricing, inflation linkage. If a formal offer lands, I’d expect a premium anchored on NTA (vs cash-flow multiples), with flexibility to add leverage post-take-private. The 26 November Budget is a swing factor for valuation, but also a forcing function: the PUSU date (10 November) front-runs fiscal risk.

Risks & watch-list

• Bid risk: No firm offer by 10 November; shares could mean-revert if talks lapse.

• Fiscal/regulatory: Budget on 26 November may tweak property-related taxes/business rates; could dent sector multiples or cash yields.

• Macro demand: UK housing transaction volumes and SME health drive move-ins; any slowdown pressures occupancy and rent growth. (Sector commentary points to stable UK occupancy but softer vs Europe in 2025.)

• Competition/execution: Safestore/Shurgard remain active; planning and build-out for 14-site pipeline must land on time/cost to sustain growth.