The Segro takeover by US rival Prologis has taken a dramatic turn as the UK warehouse landlord's board unanimously agreed to recommend the £14bn offer. This decision, announced after market close on Wednesday, marks a significant reversal from earlier rejections and represents one of the largest foreign takeovers of a UK-listed company.
Why the Segro Board Changed Its Mind
Less than a month ago, Segro rejected an initial £12.6bn approach from Prologis, followed by two subsequent bids. However, pressure from major investors, including Norway's Norges Bank Investment Management (which holds 1.3% of Prologis and 8% of Segro), pushed the board to reconsider. The revised proposal offers 0.092 new Prologis shares per Segro share, valuing the company at £10.32 per share – a 3.9% increase from the prior offer and 9.5% above the initial disclosure in June.
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Key Terms of the Deal
- Proposed acquisition by Prologis, a California-based real estate investment trust
- Segro shareholders receive Prologis shares plus a permitted dividend
- Prologis committed to a secondary listing for Segro on the London Stock Exchange
- Deadline extended to August 12 under the UK's "put up or shut up" (PUSU) rule
Comparison of Prologis Offers
| Offer | Value | Per Share | Increase |
|---|---|---|---|
| Initial (June) | £12.6bn | £9.42 | – |
| Second offer | ~£13.5bn | £9.93 | 5.4% |
| Final offer | £14bn | £10.32 | 9.5% from initial |
The Segro board called the final offer a "best and final" proposal, urging shareholders to accept. Prologis shares fell up to 3% in New York before recovering slightly, reflecting market uncertainty about the deal's integration risks.
Impact on the London Stock Market
This acquisition is a blow to the London Stock Exchange, which has seen a wave of foreign takeovers of UK-listed companies. Segro, a FTSE 100 member, builds and rents massive warehouses to firms like Amazon and Netflix. The deal underscores the attractiveness of UK real estate assets to international buyers.
Investor Takeaways
- Segro shareholders will receive Prologis shares, gaining exposure to a larger global platform
- The secondary listing ensures continued London presence
- Norges Bank's intervention highlights activist investor influence
- Deal remains subject to regulatory approvals and shareholder vote
FAQ
What is the value of the Segro takeover by Prologis?
The deal is valued at approximately £14 billion, with Segro shareholders receiving 0.092 Prologis shares per share, equating to £10.32 per share.
Why did Segro's board initially reject the offer?
The board deemed earlier proposals too low and insufficient to reflect Segro's growth prospects. However, pressure from investors and improved terms led to the reversal.
What is the PUSU deadline in this transaction?
Prologis had a "put up or shut up" deadline of 5pm UK time on Wednesday, which was extended to August 12 to finalize a firm offer.
Will Segro remain listed in London?
Yes, as part of the deal, Prologis has committed to establishing a secondary listing for Segro on the London Stock Exchange.
As the deadline approaches, investors should monitor regulatory reviews and shareholder votes. The Segro takeover represents a pivotal moment for UK corporate governance and cross-border M&A. Stay tuned for updates on GrandGoldman.com.
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