The rejection of a £12.6 billion takeover bid by FTSE 100-listed Segro has sparked significant market activity, with the company's share price surging nearly 18% to 872.40p following the announcement. This move values the UK real estate investment firm at approximately £15.8 billion, well above Prologis' proposed offer of 925p per share – a premium of almost 25% over Segro's pre-announcement closing price.
The proposed deal would have seen investors retain a 10.5% stake in the combined entity, with Prologis arguing that a merger would unlock 'embedded opportunities for investment' that Segro cannot access alone due to structural constraints on its balance sheet and trading discount. However, Segro's board 'unequivocally' rejected the offer on June 23, citing undervaluation.
Prologis has suggested that Segro's European expansion ambitions may be hindered without a deal of this magnitude, pointing out the UK firm's asset recycling activity in the region. Segro's portfolio includes significant landholdings earmarked for data centres – a sector critical to advancements in fields like AI-guided surgery, according to chief executive David Sleath.
The proposed takeover is part of a growing trend of foreign companies targeting London-listed firms, which some analysts describe as 'under-valued'. In 2023, concerns were raised regarding a flurry of such offers, with the combined value of companies poised to exit the UK stock market reaching £43 billion. Recent examples include Tate & Lyle's acquisition by Ingredion for £2.7 billion and takeovers of Beazley and Schroders.