Segro board signals it would back £14bn takeover after battle with US bidder
Real estate group Prologis’s ‘best and final’ approach for London-listed rival follows previous £13.5bn bid
UK real estate group Segro said it was minded to recommend an improved £14bn takeover offer from US rival Prologis after a weeks-long takeover battle.
Prologis on Wednesday raised its bid for London-listed Segro to a “best and final” offer of 1,032p per share, up from an offer of 993p that valued the UK company at £13.5bn announced on Monday.
The fourth bid came after Segro had insisted that remaining as an independent company would provide superior returns for its shareholders and said its shares had been valued at about 1,300p.
The deal would be the biggest for a London-listed group this year.
Segro’s board said the new proposal was “at a level that it would be minded to recommend” to shareholders if a firm proposal arrives ahead of an extended August 12 deadline for the bidder to finalise its offer or walk away.
Prologis said late on Wednesday that it welcomed Segro’s announcement and that it was “ready to work with the Segro board in reaching an outcome that delivers value for all stakeholders.”
The latest bid would pay investors mostly with shares in Prologis but includes up to £3.5bn in cash. Segro shareholders would own about 9 per cent of Prologis following a combination if the cash option is fully taken up.
Segro said Prologis had agreed to add a secondary London listing of its shares after any deal. It will now allow Prologis to conduct due diligence.
Prologis has been increasing pressure on Segro in recent days to engage with its overtures. Dan Letter, Prologis chief executive, told the FT this week that the UK group was relying on “very aspirational” projections as it resisted the takeover bid.
“We have listened to feedback from shareholders and . . . improved our proposal to make a compelling offer to the Segro board. We run Prologis with discipline and this is our best and final offer,” Letter said earlier on Wednesday as he announced the bid.
Prologis’s offer has gained backing from leading shareholders, including the Norwegian wealth fund. Dutch group APG Asset Management, which owns 5 per cent of Segro and more than 2 per cent of Prologis, said the two groups should “enter into formal engagement and carefully consider the opportunities such a combination may present”.
However, a top 10 shareholder told the FT that the latest offer was still too low. “I will be waiting for what the board says. I had in mind some price levels at which I’d say to the board ‘I think you should engage . . . to either get a better deal or open the books’, but it’s frustratingly below that.”
He continued: “They made an approach in 2024, they’ve made four different offers now. If over the next 12 months Segro’s share price is disappointing, they’ll be back.”
He also said Segro was a “unique” asset and that “you can’t buy another Segro”.
Segro shares closed at 895p on Wednesday.