The escalating takeover battle between FTSE 100 property giant Segro and its US rival Prologis has reached a critical juncture, with Segro once again rejecting a third bid from the American company. The latest offer, made last week, valued Segro's total shares at £13.5bn, or £9.93 per share, comprising a mix of Prologis shares and a significant cash component of £2.7bn, a 9.7% premium on Segro's current market price.
Prologis has argued that its bid represents an attractive opportunity for Segro shareholders to gain exposure to a more diversified global portfolio and benefit from the company's extensive data centre platform. However, Segro's management remains unconvinced, citing concerns over undervaluation of key assets, particularly its data centre estate, which they claim are not adequately reflected in Prologis's offer.
The controversy centres on the valuation of each company's respective data centre portfolios, with Segro chief executive David Sleath warning investors that accepting Prologis's proposal would dilute their ownership stake in Segro's valuable pipeline. Prologis counters this by asserting it offers a 'more experienced, larger and better-capitalised data centre platform', which could provide enhanced returns for shareholders.
Adding to the pressure, Prologis highlighted a historical offer from March 2024, claiming that if accepted, Segro shareholders would have been £3.5bn (or 36.5%) richer. The US firm has signalled its intent to pursue the acquisition by considering a secondary listing on the London Stock Exchange, sparking concerns over the potential implications for the UK-listed real estate investment sector.
Analysts at Stifel have suggested a possible compromise around 1,110p per share, but also warned that a sale of Segro could have 'significantly negative implications' for the sector's very survival. Sources close to the matter anticipate Prologis will continue its pursuit with increasing vigour, suggesting an increasingly complex situation ahead.
This ongoing struggle underscores the strategic importance of industrial and logistics real estate, particularly data centres, in the current economic landscape, as both firms vie for dominance in a high-growth sector.