Segro, the UK's largest listed commercial property landlord, has firmly rejected a £12.6bn takeover approach from US rival Prologis, dismissing the 925p-per-share offer as undervaluing the company. The board stated the bid was 'a long way short of Segro's own views on value,' marking the latest in a series of opportunistic US takeover attempts on British firms.
Segro's Strategic Value and Portfolio Strength
Segro, formerly known as Slough Estates, has transformed into a leading owner of warehouses and logistics centres across the UK and continental Europe. Its portfolio includes big-box warehouses (35% of total) and a growing focus on AI datacentres, which currently make up 8% of assets but have a heavier weighting in the development pipeline—over 2.5GW of datacentre capacity. The company's assets are concentrated in the space-constrained south-east of England, a key appeal for investors.
Over the past decade, Segro has delivered compound annual growth of 8% in asset values, earnings per share, and dividends, meeting investor expectations for a property portfolio. Despite this, its shares traded at a 25% discount to net asset value before the bid, partly due to interest rate sensitivity and a persistent discount averaging 17% over three years.
Prologis's All-Share Offer and Strategic Arguments
Prologis, a $130bn global logistics giant, proposed an all-share deal, inviting Segro shareholders to switch into a larger, better-performing stock with greater financial muscle to develop Segro's portfolio, including datacentres. Prologis argued that Segro's discount to asset value has been normal, and its global reach could accelerate growth.
However, analysts noted that Segro shareholders already had the option to buy Prologis stock independently. Many chose Segro for its 62%-38% UK-continental European balance and increasing AI exposure, assets that would represent only a tenth of Prologis's combined portfolio.
Market Reaction and Analyst Views
Following the rejection, Segro's shares rose 17% on Wednesday, reflecting investor belief that a higher bid may emerge. Shore Capital stated: 'Shareholders should demand a far better offer from Prologis for it to be taken seriously and control to be ceded.' Panmure Liberum added: 'The most significant takeaway is that the world's largest logistics REIT sees sufficient long-term value in [Segro's] platform to pursue a transaction at all.'
Analysts suggest that even if no deal materializes, the bid serves as a valuation prop, and not all of Wednesday's share price gains should evaporate. The episode underscores the UK's challenge in valuing its own assets amid persistent takeover interest from US firms.
