The battle over the future ownership of Segro, a FTSE 100 logistics property group, intensified as the company firmly rejected a £12.6 billion bid from US real estate investment trust Prologis. Segro, which owns warehouses and data centres across Europe valued at around £18 billion, declined to enter takeover talks, with chairman Andy Harrison stating the offer was significantly undervalued.
Prologis, based in San Francisco, made an unsolicited approach proposing to exchange 0.084 new Prologis shares for each Segro share. In a presentation to Segro shareholders, Prologis outlined the strategic benefits of a potential merger, highlighting the combined group’s enhanced global platform and financial strength. The US firm argued that the bid offered a substantial upfront premium and the opportunity for long-term value creation, particularly emphasizing Segro’s data centre investments and potential synergies.
However, Segro’s board dismissed the proposal as opportunistic and inadequate. Harrison criticized the offer for failing to reflect the quality, scarcity, and growth potential embedded in Segro’s portfolio, describing Prologis’s approach as an attempt to acquire the company on the cheap. He reiterated the board’s fiduciary responsibilities to shareholders, stating that further engagement would not be entertained unless a significantly improved offer is made.
Prologis also contended that Segro’s current market valuation reflects structural constraints, including the funding trade-offs necessary to support its planned data centre expansion, which could limit shareholder returns. Nevertheless, Segro maintained that its standalone valuation, closer to £18 billion, better captures the company’s growth prospects and unique assets.
The deadline for Prologis to make a firm offer is July 22, after which it may withdraw its bid. Meanwhile, Segro’s shares experienced a modest increase following the rejection, closing up just under half a percent.
Segro’s origins date back to 1920 when it was established as the Slough Trading Company, initially managing a business that repaired and sold old military vehicles before expanding into one of Europe’s largest logistics property companies.
The dispute highlights the challenges of cross-border acquisitions in the property sector, where differing assessments of asset value and growth potential frequently lead to contested bids. Both companies remain under close watch by investors as the deadline approaches.