Segro Bid Rejected
Segro Rejects Prologis' £13.5 Billion Bid, Citing Undervalued Growth and Superior Standalone Plan
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Key Points
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Prologis highlights five-year total shareholder returns of 38.6% versus Segro’s 20.1% decline, reinforcing its argument that joining the larger platform would unlock value.
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Prologis says it intends to explore the feasibility of a secondary listing of Prologis shares on the London Stock Exchange if a deal is reached.
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CBRE values Segro at about £13 per share, a valuation Prologis contends is unrealistic and argues there is no market evidence for a 993p level.
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The offer structure is largely stock-based, with Prologis offering 0.0890 new Prologis shares for each Segro share plus a cash option of up to £2.7bn, so value partly tracks Prologis’ share price.
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Prologis argues Segro’s standalone plan relies on a long-dated, often un-zoned and untenanted development pipeline, and calls the 8% discount rate used by Segro as understating execution risk and capital costs.
Segro has turned down a third takeover bid from US rival Prologis, worth £13.5 billion — or 993p per share — calling the offer too low. Investing.com reported the proposal arrived on July 17, made up largely of Prologis shares plus a cash option worth up to £2.7 billion, roughly 20% of the total deal value.
Prologis is now going directly to Segro shareholders to make its case, bypassing the board after being rejected three times. ADVFN reported Segro shares fell 1.7% on the news, as investors weighed whether the two sides can close the gap before a July deadline for formal bid talks.
Why Segro Says No to £13.5bn Deal
Segro's board says the offer fails to reflect what the company is worth. Business Cloud reported Segro's stance as effectively: "You won't acquire us on the cheap." The company points to its development pipeline — including logistics properties and data centres — as reasons its value runs higher than Prologis is willing to pay.
CBRE, an independent property valuer, puts Segro's worth at around £13 per share. That is far above the 993p Prologis is offering. Segro argues its standalone strategy — growing its own pipeline without a merger — is the better path for shareholders.
Prologis Challenges Segro's Own Math
Prologis is not backing down. Market Screener reported the US firm went straight to Segro shareholders after the board rejection, arguing the 993p offer carries real upside because much of the payment is in Prologis stock — which could rise in value.
Prologis says CBRE's £13 per share valuation is unrealistic. It argues there is no market evidence for that price. Prologis also questions Segro's pipeline, saying much of it is long-dated land that is not yet zoned or tenanted. The company also disputes the 8% discount rate Segro uses to value future projects, calling it too low given real execution risks.
Five-Year Returns Gap Drives Prologis Push
Prologis is leaning hard on performance data to make its case. Over five years, Prologis delivered total shareholder returns of 38.6%. Segro's shareholders saw a 20.1% decline over the same period. Financial Times reported the offer is largely stock-based — 0.0890 new Prologis shares for each Segro share — meaning Segro investors would become part of the larger US platform.
To sweeten the appeal, Prologis says it would explore a secondary listing of its shares on the London Stock Exchange if a deal goes through. That would give UK investors easier access to trade the combined company's stock, addressing one concern about holding US-listed shares.
July Deadline Looms as Bigger UK Takeover Wave Grows
A formal deadline is approaching for Prologis to submit a binding offer. Business Cloud noted this fits a wider pattern of overseas buyers chasing UK assets, which many see as undervalued compared to global peers. If completed, this would rank as one of the largest deals on the London market this year.
Segro has hinted at other options if no deal is struck, including a potential secondary listing of its own shares. For now, the two sides remain apart on price. The gap between 993p and the £13 figure CBRE cites is large — about 30%. Bridging that gap in the time left will be the central challenge for both camps.
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