Britain's Segro has rejected a third takeover bid from U.S. warehousing giant Prologis, valuing the offer at £13.5 billion ($18.2 billion) and escalating a standoff that now hinges on shareholder pressure and a fast-approaching regulatory deadline.
The latest proposal, which values Segro at £9.93 per share, consists of 0.0890 Prologis shares for each Segro share plus a partial cash alternative of up to £2.7 billion. Prologis also said it would explore a secondary London listing following the deal's completion.
Segro's board, led by Chairman Andy Harrison, dismissed the offer as inadequate. "The Board does not believe that Prologis's latest proposal to acquire Segro reflects the quality, scarcity or long-term prospects of Segro's portfolio and platform," Harrison said in a statement.
The rebuff comes just two days before a July 22 deadline to formalise a deal under British takeover rules. Prologis has now taken its case directly to Segro's shareholders, urging them to encourage the board to recommend the combination and warning that the offer provides "upfront value, greater flexibility and long-term upside opportunity."
Segro shares fell as much as 2.2% in early trading as investors worried that Prologis might walk away, before recovering some ground to trade down 0.3% by mid-morning. Since Prologis's interest became public on June 24, Segro shares have gained nearly 21%, though they remain well below the proposal price.
Prologis and Segro also confirmed that the U.S. group had proposed a takeover in March 2024, which was also turned down. The persistence of Prologis underscores its strategic appetite for Segro's European logistics portfolio, which spans approximately 10.9 million square metres across the continent.
Segro has been actively building out a data centre pipeline to capture a share of the booming artificial intelligence industry, a move that analysts say enhances its long-term valuation case. Kepler Cheuvreux analyst Frederic Renard noted that Segro's rejection was "hardly surprising given that it has effectively anchored its valuation expectations at around 1,300 p", while adding that some shareholders are "increasingly vocal" in arguing that the board should engage with Prologis.
If a deal is ultimately agreed, it could rank among the largest takeovers of a UK-listed company. The outcome now depends on whether Prologis can win over Segro's shareholders or sweeten its offer further before the looming deadline.
