Key facts
- Prologis is attempting to acquire Segro, a FTSE 100 company.
- Prologis has cited Segro CEO David Sleath's age (65) as a concern regarding leadership succession.
- Segro has argued that Prologis's former CEO, Hamid Modghadam, retired at 69.
- A meeting between the companies on Sunday did not result in an agreement.
- Norges Bank, a significant shareholder in Segro, has encouraged further talks.
Prologis's bid to acquire Segro has become entangled in a dispute over the age of Segro's chief executive, David Sleath. The US real estate giant has reportedly informed Segro's investors that the 65-year-old Sleath is nearing retirement, suggesting Segro would be better integrated into Prologis. Segro has countered this narrative by pointing out that Prologis's own former chief executive, Hamid Modghadam, retired at the age of 69, four years older than Sleath.
Prologis, which manages approximately $98 billion in assets, initiated its pursuit of Segro last month. Despite recent talks between the management teams on Sunday, no agreement was reached. Prologis has reiterated concerns to Segro's investors about leadership succession, noting that Sleath has led the company for 15 years, significantly longer than the average FTSE 100 CEO tenure.
Sources close to the discussions suggest Sleath's age is a point of concern for some stakeholders. However, individuals close to Segro have dismissed Prologis's tactics as a 'cheap shot,' emphasizing that Modghadam remained involved as executive chairman after his retirement. Sleath himself has publicly denied imminent retirement plans, stating he is in good health and humorously suggesting retirement when his 'Whoop age' reaches 51, currently being 51.
Segro's chairman, Andy Harrison, expressed strong support for Sleath, calling him one of the sector's strongest CEOs with an impressive track record. He acknowledged that succession planning is a board responsibility but stated it is not a current priority given Sleath's commitment.
Following the stalled Sunday meeting, Segro criticized Prologis for not presenting a revised offer. Prologis responded that the meeting's purpose was to explore the possibility of a transaction, not to submit a new bid. On Tuesday afternoon, Norges Bank, which holds significant stakes in both companies, urged them to enter constructive discussions, believing Prologis's proposal warrants consideration.