The proposed £12.6 billion takeover bid by Prologis for Segro has sent shockwaves through the FTSE 100, with investors eager to capitalise on the potential for further gains in the UK's largest listed warehouse and logistics property firm. The bid values each Segro share at 925p, a significant 24.6% premium over the company's closing price on the day the offer was made.
However, Segro's board has unanimously rejected the proposal, stating that it falls short of their valuation expectations. Prologis' all-share offer has been characterised as 'opportunistically timed', implying that the US firm is attempting to capitalise on a temporary dip in Segro's share price.
Segro's shares responded positively to the news, rising by as much as 15% to 875p and topping the FTSE 100 charts. This surge reflects investor optimism regarding the potential for a higher bid or the underlying value that Prologis sees in the company. Segro's business has thrived during the pandemic-driven e-commerce boom, but its share price has declined by approximately 40% from its late 2021 peak, partly due to broader geopolitical issues affecting UK and European real estate valuations.
The company highlighted its robust development pipeline, particularly in data centres, as a key driver of its future value. The Slough Trading Estate, home to one of the world's largest portfolios of data centres, is understood to be a significant factor in Prologis's interest. This strategic asset could potentially unlock substantial growth opportunities for Segro.
Industry experts believe that this unsolicited bid may have broader implications for the UK's real estate investment trust (REIT) sector. Oli Creasey, head of property research at Quilter Cheviot, notes that the entire sector might now be viewed as attractive for larger, foreign entities. Dan Coatsworth, head of markets at AJ Bell, warns that a successful takeover would represent another significant loss of a large-cap company from the UK market, potentially diminishing its breadth and quality.