Segro Plc, Europe's largest warehouse landlord, has rejected a revised £13.5 billion ($17.7 billion) cash and share takeover proposal from its US rival, Prologis Inc. The offer, which valued Segro at 1,020 pence per share, included some cash to address concerns from shareholders who were put off by the all-share nature of the initial bid. This marks the second time Segro has rebuffed Prologis, the first offer being £12.6 billion ($16.6 billion) which valued the company at 925 pence per share.
Segro's board unanimously rejected the new proposal, reiterating that it significantly undervalues the company's future growth prospects. They argue that the bid is opportunistic, coming at a time when UK company valuations are dampened, and fails to account for Segro's substantial development pipeline and its strategic focus on data centers in Europe. Segro's CEO, David Sleath, has previously suggested a valuation closer to £13 per share, and analysts like Matthew Saperia from Peel Hunt indicate that shareholders would only begin to consider an offer around £10.50 per share.
The initial all-share offer faced criticism from some Segro shareholders, including exchange-traded funds, who would have been unable to hold Prologis shares. The inclusion of a cash component in the revised offer aimed to address this. However, Segro remains steadfast, emphasizing its independent growth strategy, which includes an £800 million joint venture in Paris for data centers and significant new lettings. Under City rules, Prologis now has until 5 pm on Wednesday to either raise its offer further or withdraw for six months.
