Segro rejects Prologis bid and defends growth case

Segro stands firm

Segro has rejected Prologis’s £12.6 billion all-share approach and is defending its case for remaining independent, saying the offer does not properly value its logistics and data centre business.

The UK warehouse and data centre owner said the proposal did not justify further engagement. Prologis is still pressing for talks, leaving the takeover battle active ahead of a July 22 deadline under UK takeover rules.

The dispute now turns on valuation, timing and whether the US group can persuade Segro’s board or shareholders that a deal should still be negotiated.

How the bid developed

Prologis submitted an indicative all-share approach on June 16. Segro rejected the proposal on June 23, and public reporting on June 24 disclosed more of the economics behind it.

That reporting said the bid valued Segro at £12.6 billion and implied 925p a share. Under the proposed terms, Segro shareholders would receive 0.084 Prologis shares for each Segro share and would own about 10.5% of the combined company if the transaction completed.

Segro described the approach as opportunistically timed and said it fell short of its view of the business.

Segro’s growth case

Segro used an investor presentation this week to set out a longer-term defence of its standalone strategy. It said it expects earnings per share to rise to 50p by 2030, compared with 36.6p now, and argued that the market is not fully valuing its development pipeline.

The company also pointed to a CBRE valuation cited in reporting at about £13 a share, above the implied offer price. Segro said its current net asset value is about £9.05 a share and that the Prologis approach does not reflect the quality, scarcity and growth embedded in the business.

Segro has also highlighted the potential of its data centre portfolio. It said data centre net rental income could rise from 7% of total income today to 30% by 2035.

Prologis keeps pressing

On July 9, reporting said Prologis was still seeking talks on its approach. Segro responded that the proposal gave no basis for further engagement.

Prologis has argued that the combination would let Segro investors benefit from its capital, data centre expertise and larger platform scale. The US company is trying to keep the deal alive while the timetable set by UK takeover rules continues to run.

What happens next

The immediate question is whether Prologis improves its offer, makes a firm bid or walks away before July 22.

Another open issue is whether Segro’s shareholders push the board to reconsider engagement, especially if market trading or valuation data shift. Regulatory or takeover panel filings could also clarify the timetable.

For now, Segro is betting that its logistics portfolio, earnings growth and data centre exposure will justify a higher value on a standalone basis. Prologis is betting that scale and capital can still bring the board back to the table.