Segro’s board has agreed to back a best-and-final $18.7 billion Prologis takeover bid, sending shares to a fresh high on Thursday.
Shares in Segro jumped further on Thursday after its board agreed to recommend a best-and-final £14 billion ($18.7 billion) takeover bid from US warehouse group Prologis. If completed, it would be the largest takeover of a London-listed company this year, according to Yahoo Finance UK.
Segro shares are changing hands around 955.6p by late morning in London on Thursday, up 6.8% on the day, after touching an intraday high of 969p earlier in the session. That extends Wednesday’s 2.9% gain, when the board first signalled it would back the offer, and takes the stock well clear of the roughly 604p to 918p range in which it had traded over the past year.
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Prologis’ “best and final” proposal, tabled early Wednesday, values Segro’s issued share capital at approximately £14 billion. Under the terms, Segro shareholders would receive 0.0920 new Prologis shares for every share held, with the option to take up to 25% of the consideration in cash at a fixed price of 1,031.7 pence per share. That values each Segro share at 1,031.7 pence, a 39% premium to Segro’s closing price on 23 June, the day before Prologis’ interest became public. Segro’s board said it had “unanimously concluded” the terms were at a level it would be minded to recommend to shareholders.
It is the fourth proposal Prologis has put to Segro since June, after the board rejected three earlier approaches, including a £13.5 billion offer just two days before Wednesday’s reversal, for undervaluing the company.
Prologis first approached Segro in March 2024 with an all-stock proposal that was rejected within 72 hours. It returned in June this year and raised its offer three times within a month, arguing Segro trades at a discount to net asset value because it must issue dilutive equity to fund its development pipeline. Segro had faced mounting shareholder pressure to engage, including from Norges Bank Investment Management and CCLA Investment Management, which both urged the two boards to reach an agreement.
Kepler Cheuvreux upgraded Segro to “buy” from “hold” last week and raised its price target to 1,010 pence from 780 pence, arguing the shares were undervalued even if no deal materialised. Dan Letter, chief executive of Prologis, said: “We run Prologis with discipline and this is our best and final offer.”
The UK’s Takeover Panel has given Prologis until 5pm on 12 August to either announce a firm offer under City takeover rules or walk away. Prologis has also floated a secondary London listing for the combined group if there is sufficient investor demand. A firm offer would mark another blow to London’s shrinking stock market, following recent takeovers of Mitie and Rotork, and would test whether shareholders are ready to trade a London listing for exposure to a larger, US-based logistics group.