Self Storage Group Inc. (SSG), an investment-management company with interests in self-storage, has adopted a stockholder rights plan. The move is another step in the company's decision last year to change from an investment company to an operating company that “owns, operates, manages, acquires, develops and redevelops professionally managed self-storage facilities.” SSG is also trying to maintain its qualification as a real estate investment trust (REIT) for federal tax purposes.
The board’s approval of the rights plan is intended to preserve the company's ability to fully implement its operational change and discourage the accumulation of shares by any person or group who could “adversely affect” SSG’s ability to qualify as a REIT, officials said in a press release. The company applied to the Securities and Exchange Commission on March 28 to deregister as an investment company.
SSG qualified for REIT tax treatment in 2013. To continue under that designation, no more than 50 percent of the value of the company's outstanding shares may be owned directly, indirectly or constructively by five or fewer individuals or entities, officials said.
To implement the rights plan, the board declared a special dividend of one non-transferrable right for each outstanding share of the company's common stock at $.01 per share to stockholders of record at the close of business on April 4. Each right entitles the registered holder to purchase one share of common stock at $.01 per share, subject to adjustment. The rights will be distributed as a non-taxable dividend and expire on Aug. 1, unless they are redeemed earlier or exchanged by SSG.
The company previously operated as Global Income Fund. SSG owns seven self-storage properties under the Global Self Storage brand in Illinois, Indiana, New York, Pennsylvania and South Carolina through its wholly owned subsidiaries. Those assets comprise more than 80 percent of its net assets, according to company officials. As part of its new business plan, SSG also has invested in REITs, including Extra Space Storage Inc., Public Storage Inc. and Sovran Self Storage Inc.
SSG is a non-diversified, closed-end, investment-management firm whose common stock is traded over the counter under the ticker symbol “SELF.” The primary investment objective of the company has been to provide a high level of income, with capital appreciation as a secondary objective.