The £14bn Prologis takeover bid, which has seen Segro's board perform a dramatic U-turn, is set to shake up the FTSE 100 property sector. The UK warehouse landlord's unanimous recommendation to shareholders comes just days before a regulatory deadline under the UK's takeover code, with its shares currently trading at £10.32 per unit - representing a 9.5% increase on Prologis's initial approach in June and a staggering £2bn higher than its initial offer of £12.6bn.
Prologis has effectively timed its 'best and final offer' to perfection, offering 0.092 new shares for each Segro share as the deadline approaches. This revised proposal represents one of the largest foreign takeovers of a UK-listed entity in recent times, with analysts expecting significant implications for the global logistics industry.
Under the terms of the proposed deal, Segro shareholders would be entitled to receive a permitted dividend, while the company has also requested that Prologis establish a secondary listing on the London Stock Exchange. This move is likely aimed at placating major investor Norges Bank Investment Management, which holds significant stakes in both firms and had urged Segro to engage with its US counterpart.
Segro's transformation from a military repair depot in Slough into an industrial estate in 1920 has led the company to manage 10.9 million square metres of space across Europe today. Its Slough trading estate is home to the world's second-largest portfolio of data centres, while both Segro and Prologis have been actively expanding their data centre portfolios to capitalise on the rapidly growing artificial intelligence industry.
The company's shares experienced a significant surge during the Covid-19 pandemic due to e-commerce demand for warehouse space, but declined by approximately 40% in spring 2022. This proposed takeover aligns with a broader trend of overseas companies making bids for British firms, as UK stocks have become comparatively cheaper since the start of the Iran conflict.