In the matter of National Storage Holdings Limited

By Originating Process filed on 18 February 2026, the Plaintiffs seek orders under ss 411(1) and 1319 of the Corporations Act 2001 (Cth) (“Act”) and s 63 of the Trustee Act 1925 (NSW) (“Trustee Act NSW”) or, alternatively, r 54.02 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic). This relief is sought in respect of a scheme of arrangement and a trust scheme in relation to National Storage REIT (“NSR”). NSR is a stapled security, comprised of shares in the First Plaintiff, National Storage Holdings Ltd (“National Storage Company”) and units in the National Storage Property Trust (“National Storage Trust”). The Second Plaintiff, National Storage Financial Services Ltd (“National Storage Trustee”) is the trustee and responsible entity of the National Storage Trust.

National Storage Company seeks orders convening a meeting of NSR securityholders, as holders of fully paid ordinary shares in National Storage Company, to consider a scheme of arrangement providing for the transfer of National Storage shares to Iridium SP BidCo Pty Ltd. National Storage Trustee seeks judicial advice that, among other things, it would be justified in convening a meeting of NSR securityholders, as holders of fully paid ordinary units in National Storage Trust (“National Storage Units”), to consider the implementation of the trust scheme; and proceeding on the basis that constitutional amendments to implement the trust scheme are within the constitutional powers of alteration conferred by s 601GC of the Act.

By way of background, NSR is a large self-storage provider, dealing with residential and commercial customers at more than 290 storage-centres across Australia and New Zealand, and is listed on the Australian Securities Exchange (“ASX”). The proposed bidders for NSR are owned by a consortium of Brookfield Property Group Australia Ltd, on behalf of its Affiliates and their managed funds; and affiliates of GIC Investment (Australia) Pty Ltd. If the share scheme and trust scheme are approved and implemented then the National Storage Units stapled to National Storage shares will be unstapled; one of the bidder entities (“Bidder Company”) will acquire all of the National Storage shares; another bidder entity (“Bidder Trustee”) will acquire all of the National Storage Units; and NSR securityholders on the NSR security register at relevant dates will receive $2.86 per NSR security, comprised of a permitted distribution of 6 cents per NSR security paid by National Storage Company on 20 February 2026 and the scheme consideration. Any NSR securityholder that acquired NSR securities after the Permitted Distribution Record Date (as defined) but before the Scheme Record Date (as defined) will receive $2.80 for each of those NSR securities if the share scheme and trust scheme are implemented, being the scheme consideration less the amount of the permitted distribution. The cash consideration per NSR security implies an equity value of approximately $4 billion and an enterprise value of approximately $6.7 billion for NSR.

I made the orders sought by the Plaintiffs at the conclusion of the first Court hearing in respect of the scheme on 10 March 2025. These are my reasons for doing so, and I have drawn on the helpful submissions of Mr Izzo, with whom Mr O’Brien appears for the Plaintiffs, in this judgment.

The Plaintiffs read the affidavit dated 18 February 2026 of Mr Dilip Ramaswamy, a solicitor acting for them, which addressed the nature of NSR’s business and the background to the application.

By her affidavit dated 8 March 2028, Ms Emily Ackland, who is General Counsel of NSR, also outlined the structure of NSR, the terms of the National Storage Trust and the identity of the bidders. She referred to conditions precedent to the implementation of the scheme and outlined the scheme booklet, to which I was taken in submissions; the verification process in respect of the scheme booklet, which was in conventional form; and the lodgement of documents with the Australian Securities & Investments Commission (“ASIC”). She also addressed other matters, including the deed poll executed by the Bidder Company and Bidder Trustee; exclusivity provisions; the terms of a break fee and reverse break fee; the proposed despatch of the scheme booklet; the conduct of the share scheme meeting and trust scheme meeting; NSR’s incentive arrangements and the interests of its directors in NSR securities; the position as to NSR exchangeable notes; and proposed communications with securityholders prior to the scheme meetings.

The Plaintiffs also read the affidavits dated 6 and 9 March 2026 of Mr Gregory Golding, a solicitor acting for the Bidders, who addressed the Bidders’ entry into the Scheme Implementation Deed (“SID”), their structure and ultimate owners, their funding arrangements and the verification of information relating to the Bidders contained in the scheme booklet.

The Plaintiffs also tendered a letter dated 9 March 2026 from ASIC which, in common form, reserved ASIC’s position as to s 411(17)(b) of the Act to the second Court hearing and indicated that it did not currently propose to appear to make submissions or intervene to oppose the scheme at the second Court hearing.

The Court’s role at the first Court hearing in respect of a scheme is to determine, in the exercise of its discretion, whether to approve the convening of a scheme meeting and the explanatory statement if it is satisfied of several matters, namely that the plaintiff is a Pt 5.1 body; the proposed scheme is an “arrangement” within the meaning of s 411 of the Act; the scheme is bona fide and properly proposed; ASIC has had a reasonable opportunity to examine the proposed scheme and explanatory statement, to make submissions and has had 14 days’ notice of the proposed hearing date of the first Court hearing; the procedural requirements under the Supreme Court (Corporations) Rules 1999 (NSW) have been met; and there is no apparent reason why the scheme should not, in due course, receive the Court’s approval if the necessary majority of votes is achieved: Re Orion Telecommunications Ltd [2007] FCA 1389 at [5]; Re Staging Connections Group Ltd [2015] FCA 1012 at [19]; Re Wridgways Australia Ltd [2010] FCA 1187 at [30]; Re Ellerston Global Investments Ltd [2020] NSWSC 879 at [25]; Re Vocus Group Ltd [2021] NSWSC 630 at [12].

The Court will not ordinarily summon a scheme meeting unless the scheme is of such a nature and cast in such terms that, if it achieves the statutory majority at the meeting, the Court would be likely to approve it. The Court will consider whether the proposed scheme is fit for consideration at the proposed scheme meeting, in the sense that it is of such a nature and cast in such terms that, if it achieves the statutory majority at the meeting, the Court would be likely to approve it on the hearing of a petition which is unopposed; and members are to be properly informed as to the nature of the scheme before the scheme meeting: F T Eastment & Sons Pty Ltd v Metal Roof Decking Supplies Pty Ltd (1977) 3 ACLR 69 at 72, approved in Re Foundation Healthcare Ltd (2002) 42 ACSR 252; [2002] FCA 742 at [36] and [44], cited with apparent approval in Re CSR Ltd (2010) 183 FCR 358; [2010] FCAFC 34 at [58]; Re InvoCare Ltd [2023] NSWSC 1180 at [16]–[17]; Re Absolute Equity Performance Fund Ltd [2022] FCA 933 at [18]–[22]; and I have drawn here on my summary of the applicable principles in Re Blue Ocean Monitoring Ltd [2026] NSWSC 207 at [7]ff

I am satisfied that National Storage Company is a Pt 5.1 body, the proposed company scheme is an arrangement within the meaning of s 411 of the Act, and there is no reason to doubt that the scheme booklet provides proper disclosure to NSR securityholders. I have referred to evidence of a verification and due diligence process above. I bear in mind that NSR’s board unanimously recommends that NSR securityholders vote in favour of the relevant resolutions, in the absence of a Superior Proposal (as defined) and subject to the independent expert, Kroll Australia Pty Ltd (“Kroll”), continuing to conclude that the proposed transaction is in the best interests of NSR securityholders. The Plaintiffs have obtained a report as to whether, in Kroll's opinion, the proposed transaction is in the best interests of NSR securityholders, in the absence of a Superior Proposal. Kroll has expressed the view that the value of an NSR security on a controlling interest basis is in the range of $2.72 to $2.86 and, as the scheme consideration of $2.80 falls within its assessed value range for an NSR security, the proposed transaction is fair.

There is no reason to doubt that the proposed scheme is bona fide and properly proposed and could be approved at the second Court hearing if it receives the requisite shareholder approvals. Although ASIC has reserved its position as to s 411(17)(b) of the Act in accordance with its usual practice, the Court can address that question at the second Court hearing. I am satisfied that the orders sought should be made in respect of the proposed company scheme.

Mr Izzo refers to my summary of the applicable principles in respect of judicial advice in relation to trust schemes in Re DUET Finance Ltd [2017] NSWSC 415 at [16] as follows:

Mr Izzo also rightly points out that s 601GC(1)(a) of the Act provides that the constitution of a registered scheme may be modified or repealed and replaced with a new constitution by special resolution of the members of the scheme, being 75% of the votes cast by members entitled to vote on the resolution. The power of alteration under that section is very wide, unlimited in terms, and its exercise may be the subject of judicial advice under s 63 of the Trustee Act NSW in a trust scheme context: Re Mirvac Ltd (1999) 32 ACSR 107; [1999] NSWSC 457 at [44]–[47]; Re DUET Management Company 1 Ltd (2013) 95 ACSR 34; [2013] NSWSC 817 at [10]. There is no implied limitation on the Court’s power to give advice pursuant to s 63 of the Trustee Act NSW, nor on the discretionary factors that the Court may take into account: Macedonian Orthodox Church St Petka Inc v His Eminence Petar (2008) 237 CLR 66; [2008] HCA 42 at [55]–[59].

I will deal with several specific issues that extend to the trust scheme below. I am otherwise satisfied that National Storage Trustee, as trustee and responsible entity of the National Storage Trust, would be justified in proceeding on the basis that the making of the proposed amendments to the National Storage Trust’s constitution in connection with the trust scheme, following the requisite approval by unitholders, would be within its power.

The Plaintiffs drew several matters to the Court’s attention. First, sections 9.1 to 9.3 of the scheme booklet disclose interests of NSR’s directors and that those directors hold NSR securities. Mr Izzo submits and I accept that these holdings do not require the directors to refrain from making a recommendation, given the disclosure of their interests: Re Intega Group Ltd [2021] NSWSC 1434 at [22]. If the schemes become effective, the Managing Director and Chief Executive Officer of NSR, Mr Andrew Catsoulis will receive cash payments of up to $9,508,797 (in aggregate) and will be issued 1,326,100 NSR securities under his performance incentive and transaction retention bonus arrangements. These matters have been disclosed in the Chairman’s letter and detailed in section 9.3.2 of the scheme booklet. Section 9.1 of the scheme booklet also records that NSR’s board (excluding Mr Catsoulis) considers that, notwithstanding these arrangements, it is appropriate for Mr Catsoulis to make a recommendation. I accept that these matters do not give rise to any reason why the Court should not make the orders sought in respect of the scheme meetings, where sufficient disclosure is made: Re Coca-Cola Amatil Ltd [2021] NSWSC 270 at [16]; Re Link Administration Holdings Ltd [2022] NSWSC 650 at [21].

Second, the Plaintiffs addressed the question of performance risk. Mr Izzo points out that cl 5.1 of the share scheme adopts the conventional step of making the transfer of the NSR securities to the Bidder Company subject to the provision of the scheme consideration. He also points out that the maximum aggregate amount of cash payable as consideration by the Bidders to the scheme securityholders on implementation of the schemes is expected to be approximately $4.29 billion. The Bidders’ funding arrangements (through equity funding and debt funding) are disclosed in section 6.7 of the scheme booklet addressed in Mr Golding’s affidavit. Mr Izzo also points to the Deed Poll entered into by Bidder Company and Bidder Trustee in favour of the NSR securityholders on 6 March 2026. He recognises that the Consortium is not a party to the Deed Poll given by the Bidders in favour of NSR securityholders, but relies on the debt commitments described in Mr Golding’s affidavit and the equity commitment letters given by the Consortium Members (as defined) in this respect, which are conditional upon the schemes becoming effective. I accept that, consistent with the approach taken in Re Sydney Airport Limited and The Trust Company (Sydney Airport) Limited as responsible entity for Sydney Airport Trust 1 [2022] NSWSC 25 at [40], these matters provide sufficient support for securityholders’ entitlement to receive the consideration under the schemes. I would not otherwise have been persuaded to defer this matter to the second Court hearing, where the Court should be conscious of the opportunity cost to shareholders where a scheme fails prior to or after the second Court hearing.

Third, Mr Izzo addressed the break fee and reverse break fee payable in respect of the scheme. Under cl 9 of the SID, as disclosed in section 10.1.6 of the scheme booklet, the Plaintiffs must pay the Bidders a break fee of $40,000,000 (exclusive of GST) in specified circumstances. Similarly, under cl 10 of the SID, as disclosed in section 10.1.7 of the scheme booklet, the Bidders must pay the Plaintiffs a reverse break fee of that same amount in specified circumstances. The break fee and reverse break fee represent approximately 1% of the implied equity value of NSR implied by the scheme consideration and are consistent with the Takeovers Panel’s guidance. The circumstances in which the break fee or the reverse break fee are payable do not include the failure of NSR securityholders to approve the schemes or the Court’s declining to approve the scheme or provide the judicial advice. I accept that these matters give rise to no reason not to convene the scheme meeting.

Fourth, Mr Izzo addressed the question of exclusivity. Clause 8 of the SID includes “no shop”, “no talk” and “no due diligence” obligations, and the "no talk" and "no due diligence" obligations in cl 8.3 are subject to a fiduciary carve out in cl 8.5. The "Exclusivity Period" as defined in clause 1.1 of the SID is the period from and including the date of the SID (being 8 December 2025) to the earlier of, inter alia, the End Date, being six months after the date of the SID or a later date agreed between the parties. I accept that the Exclusivity Period is capable of being precisely ascertained; is sufficiently disclosed in section 10.1.5 of the scheme booklet; and is not unreasonably long given the nature of the transaction.

Fifth, Mr Izzo addressed the treatment under the scheme of NSR Performance Rights (as defined), short term incentives and incentives under NSR’s Growth and retention incentive plan, as disclosed in section 10.2 of the scheme booklet. Under cl 4.7 of the SID, the Plaintiffs must ensure that, before 8.00am on the second Court date, arrangements have been put in place to deal with any Performance Rights, such that, subject to the schemes becoming effective, there will be no outstanding Performance Rights on the Scheme Record Date. Broadly, the NSR board (excluding Mr Catsoulis) has determined that, if the schemes become effective and the Transaction (as defined) is implemented on or before 30 June 2026, all Performance Rights under long term incentive (“LTI”) awards will vest and one NSR security for each Performance Right will be issued to the holders of the Performance Rights prior to the Scheme Record Date such that the holders of the NSR securities will be eligible to participate in the schemes; and the cash component under the LTI awards (representing 30% of the LTI awards made in each of FY24 LTI, FY25 LTI and FY26 LTI) will vest and be paid to eligible executives on or before the implementation date. The maximum aggregate amount that may be payable to all holders of the LTI awards (including Mr Catsoulis) is $2,272,029, and the maximum cash amount payable to Mr Catsoulis is $1,342,059. These matters are sufficiently disclosed in the scheme booklet. Mr Izzo also submits and I accept that the fact that holders of Performance Rights may receive benefits as a result of the scheme by reason of early or accelerated vesting does not place them in a different class: Re Probiotec Ltd [2024] FCA 298 at [62]–[65]; Re ELMO Software Pty Ltd [2023] NSWSC 12 at [25] (“ELMO”).

Sixth, Mr Izzo recognises that cl 35.6 of the constitution of the National Storage Trust provides that the governing law of that constitution is the law of Victoria. Mr Izzo submits and I accept that the Court has jurisdiction to provide judicial advice in relation to the trust scheme under s 63 of the Trustee Act NSW, where the trust has a sufficient connection to New South Wales because a significant number of members are resident in New South Wales and business operations are conducted by National Storage Trustee in New South Wales: Re Spark Infrastructure RE Ltd (2021) 156 ACSR 257; [2021] NSWSC 1385 at [25]; Re Vita Group Ltd (2023) 165 ACSR 576; [2023] FCA 400 at [35]. These matters are established here where Mr Ackland’s evidence is that approximately 2,581 NSR securityholders have a registered address in New South Wales and NSR operates 54 storage centres in New South Wales. I am satisfied that the Court has jurisdiction to give the advice sought on this basis and it is therefore not necessary to rely on the Court’s inherent equitable jurisdiction to give judicial advice or on s 4(3) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Vic), to which Mr Izzo also refers.

Seventh, Mr Izzo notes that cl 8.2 of the share scheme provides for a deemed warranty that a scheme shareholder’s shares are fully paid and free of encumbrances. I accept that a warranty of this kind will not prevent the making of orders under s 411(1) of the Act where, as here, that warranty is disclosed in the scheme booklet: ELMO at [32].

Eighth, the Plaintiffs have engaged a third party to receive inbound queries from NSR securityholders about their securities, lodging proxies, attending the meeting and voting logistics; and the scripts for the proposed inbound calls are in evidence. That third party may also undertake an outbound call campaign and/or send email reminders to NSR securityholders; and relevant documents and the script for any outbound call campaign are also in evidence. In accordance with recent practice, the Court’s approval was not sought for these communications, and no matter arose from them which I needed to raise with the Plaintiffs. Mr Izzo also addressed the manner of the despatch of scheme documents and waivers given by ASX and ASIC in respect of the scheme which raised no novel issues and provided no reason not to convene the scheme meeting.

For these reasons, I was satisfied at the conclusion of the first Court hearing that the proposed schemes were of such a nature and cast in such terms that, if they achieve the statutory majorities at the scheme meetings, the Court would be likely to approve it and provide the requested judicial advice, and that it was appropriate to make the orders sought by the Plaintiffs. I made those orders at the conclusion of that hearing.