Prologis said Monday that its enhanced bid to acquire London-based logistics warehouse operator Segro had been rejected. Prologis’ third offer, valued at £13.5 billion ($18.2 billion), represented a 6% increase above its initial proposal and included a 20% cash component.
The latest offer, a 41% premium to Segro’s (LSE.SGRO) three-month weighted average share price, would give Segro shareholders .089 new Prologis shares for each share held, with the option to receive up to 20% in cash. The prior two iterations were all-stock offers.
San Francisco-based Prologis (NYSE: PLD) asserts that a business combination would give Segro access to a larger logistics real estate network and a lower cost of capital. It previously said Segro trades at a discount because it is required to make dilutive equity issuances to fund its projects.
“Prologis’ proposal provides upfront value, greater flexibility and long-term upside opportunity,” the Monday news release stated. “SEGRO’s standalone plan relies on flawless execution of a significant, long-dated development pipeline, substantial third-party funding and an unjustified valuation.”
Prologis has until 5:00 pm London time on Wednesday to finalize firm intentions, per British takeover rules.
“Prologis’s proposals have been opportunistically timed to capitalise on a dislocated share price and just as SEGRO’s markets are inflecting and momentum is accelerating,” Segro said in a Monday statement. “The effect would be to transfer the benefits of SEGRO’s considerable embedded value and this significant progress to Prologis shareholders before they are fully reflected in SEGRO’s earnings and valuation.”
Segro said it would consider “any proposal which appropriately reflects the considerable embedded value and prospects of our business.”
Prologis said Monday that Segro rejected a March 2024 all-stock offer, which Segro also referred to as “opportunistic.” It said Segro’s shareholders “could have been better off by 36.5%” had the company accepted that plan.
Last week, Prologis raised its full-year 2026 outlook, citing record leasing activity for a fourth time in the past seven quarters.
Shares of LSE were up 0.2% on Monday in late trading on the London Stock Exchange. The stock is up 21% since Prologis’ first takeover bid on June 24. Shares of PLD were off 1.1% at 10:08 a.m. EDT compared to the S&P 500, which was up 0.3%.
Why it matters? The story highlights how logistics real estate is becoming an increasingly strategic and consolidated asset class.
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