The board of UK warehouse landlord Segro has reversed its position and agreed to recommend a £14bn takeover bid from US rival Prologis, in what would be one of the largest foreign takeovers of a UK-listed company.
Board Unanimously Backs Offer
In a statement issued after the stock market closed on Wednesday, Segro said its board had “unanimously concluded” it would recommend shareholders accept what Prologis called its “best and final offer”. The decision came nearly a month after the FTSE 100 company rejected an initial £12.6bn approach and two subsequent offers.
Prologis's revised proposal offers 0.092 new shares for each Segro share, valuing the UK company at £10.32 per share. This represents a 3.9% increase over the previous proposal and a 9.5% rise above the initial approach disclosed in June.
Extended Deadline and Conditions
Under UK takeover rules, Prologis had until 5pm UK time on Wednesday to announce a firm intention or walk away. The deadline has now been extended by three weeks, giving California-based Prologis until 5pm on 12 August to make a firm offer. Prologis welcomed the additional time and said it was willing to work with the Segro board.
Segro shareholders would also be entitled to receive a permitted dividend under the deal terms, and Segro has asked Prologis to commit to a secondary listing on the London Stock Exchange.
Investor Pressure and Market Context
Segro's about-turn came hours after major investor Norges Bank Investment Management urged engagement. Norges, which held a 1.3% stake in Prologis and an 8.3% stake in Segro at end of June, said it understood “the strategic rationale for a combination”.
Segro, originally the Slough Estates Group, began in 1920 as Slough Trading Company. It now owns 10.9 million square metres of space across Europe, including the Slough trading estate, home to the world's second largest portfolio of datacentres. Both Segro and Prologis have been expanding datacentres to tap the booming AI industry.
Segro shares soared during the Covid pandemic but began sliding in spring 2022, trading about 40% below their peak before the first Prologis offer in June. Prologis shares fell up to 3% in New York trading before recovering.
Broader Takeover Trend
Prologis's bid is part of a wave of overseas acquisitions of British companies. Laboratory testing firm Intertek recently backed a £10.6bn approach from a Swedish private equity firm, and easyJet's board approved a possible £5.7bn offer from US private equity firm Apollo, though EU ownership rules may affect that deal.
