Key facts
- Segro has rejected a third takeover bid from US rival Prologis.
- The latest offer from Prologis was valued at £13.5bn, or £9.93 per share.
- Prologis criticized Segro's valuation of its development projects as unrealistic.
- Prologis suggested shareholders would have been 36.5% better off if a March 2024 offer had been accepted.
- The core of the dispute lies in the valuation of data center portfolios.
- Analysts at Stifel believe a deal could be reached around 1,110p per share.
Segro, a FTSE 100 property firm, has rejected a third takeover bid from its US rival, Prologis. The latest offer, made last week, valued Segro at £13.5 billion, or £9.93 per share, and included an exchange of Prologis shares along with £2.7 billion in cash. Prologis stated this offer represented a 9.7% premium on Segro's share price. Prologis criticized Segro's insistence that it is being undervalued, calling the FTSE 100 firm's valuation "unrealistic" due to its "speculative, long-dated, often un-zoned and untenanted development projects." The US firm also pointed out that Segro shareholders would have been 36.5% better off had they accepted a historical takeover offer from March 2024. Prologis is reportedly considering a secondary listing on the London Stock Exchange. The central point of contention in the takeover dispute appears to be the valuation of the two companies' data center estates. Segro's chief executive, David Sleath, argued that Prologis' plan would swap full ownership of Segro's data center pipeline for a "materially lower shareholding in a different, more US-focused portfolio." Prologis countered by telling Segro shareholders that it offers a "more experienced, larger and better-capitalised data centre platform." Analysts at Stifel suggested that the parties might agree on an offer of 1,110p per share. However, they also noted that Segro's management is capable of realizing the value within its portfolio. Stifel warned that a sale could have "significantly negative implications for the very survival" of the UK-listed real estate investment sector. A source close to the matter indicated that Prologis is expected to pursue Segro "quite aggressively."