Warehouse giant Segro has officially rejected Prologis's revised takeover bid, which amounted to £13.5 billion, or 1,000 pence per share. Segro's board stated that this new offer still significantly undervalues the company, despite representing an increase from Prologis's earlier £12.6 billion, 925 pence per share all-share proposal made in June.
Prologis's updated offer was structured as a cash and share deal, a change from its initial all-share proposal. This modification addressed concerns from some Segro shareholders, including exchange-traded funds, who were unable to hold Prologis shares. Analysts had previously indicated that an offer "beginning with a nine is just not even serious," with some suggesting at least £10 or even £10.50 per share to adequately compensate shareholders for future growth.
Segro CEO David Sleath has consistently argued for a much higher valuation, around £13 per share. The company has been actively trying to bolster its value and independence, recently announcing an £800 million joint venture in Paris with Pure Data Centres Group and securing 540,000 square feet of lettings at its Coventry development. Prologis, on the other hand, indicated it would remain "disciplined on price," with its CEO Dan Letter stating the previous offer provided a "meaningful premium." Prologis faces a deadline of 5 PM on Wednesday to either raise its offer again or withdraw its bid for six months.
This marks Segro's second rejection of a hostile takeover attempt by Prologis. The ongoing saga highlights a broader trend of US companies looking to acquire undervalued UK assets amidst geopolitical turmoil and high borrowing costs. Segro's future as a London-listed entity now hinges on whether Prologis will further increase its offer to a level deemed acceptable by Segro's board and shareholders, or if it will walk away.
