Norges Bank, the manager of Norway’s sovereign wealth fund and Segro’s second-largest shareholder, has urged the British warehouse property company to resume takeover discussions with its American rival, Prologis, following the rejection of four previous offers. Norges Bank emphasized the strategic logic of combining the two businesses, in which it holds stakes, and encouraged both companies’ boards to engage in “constructive discussions” to explore a possible transaction.
Prologis has encountered persistent resistance from Segro’s board, which quickly dismissed the latest bid of £13.5 billion, describing it as substantially undervaluing the company despite representing an increase of nearly £1 billion over its earlier offer. In response to the board’s stance, Prologis has shifted its approach toward appealing directly to Segro’s shareholders to apply pressure for renewed negotiations. Norges Bank is the first major investor to publicly support further talks.
After formally rejecting the most recent offer last Friday, Segro’s board met with Prologis representatives over the weekend seeking clarity on whether a higher bid was possible, but the discussions concluded without progress. Segro, a FTSE 100 company with origins dating back to 1920 when it acquired land in Slough to develop what became the Slough Trading Estate, owns around £12 billion in warehouses and data centers across the UK and Europe. The company has long maintained that its unique and irreplaceable property portfolio justifies a premium valuation.
Segro’s management has projected that, with the successful development of its pipeline of warehouses and data centers, the business could be worth close to £18 billion within a few years. Prologis counters that Segro lacks sufficient access to capital to fully realize these development plans and has proposed a combination of cash and shares valuing each Segro share at 993p.
Industry analysts estimate that Prologis may need to raise its offer above £11 per share to gain board support. Under UK takeover regulations, Prologis must present a firm offer or abandon its bid by 5 p.m. on the deadline day. The company has not confirmed its latest proposal as final, and Segro has indicated it remains open to a sale at the right price.
Separately, Matt Norris, a fund manager at Gravis and another Segro shareholder, called for an extension of the offer deadline, arguing that negotiations should continue until Prologis delivers its best and final terms. Following these developments, Segro’s shares declined 3.5%, closing at 869.5p.