| Item 1.01 | Entry into a Material Definitive Agreement. |
As previously disclosed, on April 2, 2023, Extra Space Storage Inc., a Maryland corporation (“Extra Space”) and Extra Space Storage LP, a Delaware limited partnership (“Extra Space OP”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among Extra Space, Extra Space OP, Eros Merger Sub, LLC, a Delaware limited liability company and a wholly owned subsidiary of Extra Space (“Extra Space Merger Sub”), Eros OP Merger Sub, LLC, a Delaware limited liability company and a wholly owned subsidiary of Extra Space OP (“Extra Space OP Merger Sub” and, together with Extra Space, Extra Space OP and Extra Space Merger Sub, the “Extra Space Parties”), Life Storage, Inc., a Maryland corporation (“Life Storage”), and Life Storage LP, a Delaware limited partnership (“Life Storage OP” and, together with Life Storage, the “Life Storage Parties”). The Merger Agreement provides for, subject to the terms and conditions thereof, the combination of Extra Space and Life Storage through a series of transactions including, among others, (i) a merger of Extra Space Merger Sub with and into Life Storage, with Life Storage continuing as the surviving entity and a wholly owned subsidiary of Extra Space (the “Company Merger”) and (ii) a merger of Extra Space OP Merger Sub with and into Life Storage OP, with Life Storage OP continuing as the surviving entity and a wholly owned indirect subsidiary of Extra Space OP (the “Partnership Merger” and, together with the Company Merger, the “Mergers”). The Merger Agreement is filed as Exhibit 2.1 to Extra Space’s Current Report on Form 8-K filed on April 3, 2023.
On May 18, 2023, the Extra Space Parties and the Life Storage Parties entered into an Amendment to Agreement and Plan of Merger (the “Merger Agreement Amendment”) in accordance with Sections 2.5 and 9.5 of the Merger Agreement, to, among other matters, (i) remove the right of Minority Limited Partners (as defined in the Merger Agreement) to elect to receive shares of Extra Space common stock in lieu of Extra Space OP common units in the Partnership Merger, (ii) remove the right of holders of Life Storage OP preferred units to elect to convert their respective Life Storage OP preferred units to Life Storage OP common units prior to the Partnership Merger effective time or receive a cash payment equal to the liquidation preference upon the consummation of the Partnership Merger, and (iii) replace the top-up cash payment to be paid to certain holders of Life Storage restricted common stock with top-up grants of Life Storage performance stock units. With regard to the amendment described in clause (i), Minority Limited Partners will continue to have the right under the limited partnership agreement of Life Storage OP to elect to redeem their common limited partnership interests prior to the Partnership Merger in exchange for cash or common stock of Life Storage. With respect to the amendment described in clause (ii), all holders of Life Storage OP preferred units have elected to convert their preferred units to common units pursuant to the terms of the preferred units, so the election right described in clause (ii) is no longer necessary. With regard to the amendment described in clause (iii), such holders of Life Storage restricted stock will be entitled to receive a top-up grant of Life Storage performance stock units which represents the right to receive a number of shares of Life Storage common stock with a fair market value substantially equivalent to the top-up cash payment that they otherwise would have been entitled to receive pursuant to the Merger Agreement.
The foregoing summary of the Merger Agreement Amendment does not purport to be a complete description and is qualified in its entirety by the full text of the Merger Agreement Amendment, which is attached hereto as Exhibit 2.1 and is incorporated herein by reference.
