In a significant development for the UK property market, the global investment giant Blackstone is reportedly cooling on a potential multibillion-pound takeover of Big Yellow Group, the London-listed self-storage operator.
Deadline Looms as Interest Wanes
Sky News has learned that Blackstone is seriously contemplating abandoning its interest in a deal for Big Yellow. This comes ahead of a crucial deadline imposed by the UK's Takeover Panel, which requires the investor to announce a firm offer or walk away by December 8, 2025. City sources indicated on Monday that while a final decision has not been made, a withdrawal is now seen as the likeliest outcome.
The potential bid had been a major point of speculation in the City. Blackstone, one of the world's largest real estate investors, was said to have been working on its interest alongside the Canada Pension Plan Investment Board (CPPIB). Many analysts and investors had believed last week's budget statement from Chancellor Rachel Reeves had created favourable conditions for Blackstone to formalise its approach.
Valuation Gap a Key Sticking Point
A central issue appears to be valuation. Insiders report that Big Yellow's key executives are keen to secure an offer worth at least £14 per share. However, on Monday, the company's shares were trading at roughly £11.54, giving Big Yellow a market capitalisation of approximately £2.3 billion. This gap has proven to be a significant hurdle in negotiations.
Despite the current doubts, the situation remains fluid, and a formal bid could still materialise subject to further discussions between the parties involved.
Context of Blackstone's UK Ambitions
Blackstone's deliberations over Big Yellow come just weeks after the firm committed to investing £100 billion in the UK economy in the coming years. This pledge underscores its position as one of the most active buyers of British companies and assets.
Its substantial existing UK portfolio includes:
- The NEC conference and exhibition centre.
- Merlin Entertainments, the parent company of Legoland.
- IQSA, a major provider of student accommodation.
A successful takeover of Big Yellow would have significantly expanded its footprint in the UK's commercial property sector. When contacted for comment on Monday afternoon, Blackstone declined to comment. Big Yellow has also been approached for a statement.
