Prologis’ Takeover Saga of UK Landlord Segro Nears Finale

At long last, Prologis snagged support to acquire the United Kingdom’s largest landlord.

The board of Segro this week recommended the approval of a £14 billion ($18.7 billion) cash-and-share offer from Prologis, Bloomberg reported. The offer, which comes after a month of public back-and-forth between the firms, was considered Prologis’ “best and final.”

Prologis’ proposal includes 0.092 new shares for every Segro share, a 9.5 percent jump from the first proposal presented last month. The offer also represents a premium of 14 percent on Segro’s last posted net asset value and a 39 percent premium from the company’s share price prior to Prologis’ first offer.

There’s also a partial cash alternative being offered of up to £3.5 billion at a fixed rate of 1,031.7 pence per share. Additionally, Prologis later added a commitment for a secondary listing in London.

As of the end of last year, Segro’s property portfolio spanned 117 million square feet. Its properties largely consist of warehouses, data centers and other industrial properties in the U.K. and several other countries in Europe.

Over the last month, Prologis and Segro have publicly feuded over what constituted fair value for Segro, which is increasingly active in the data center business. Officials at Prologis claim the company’s expertise will deliver more value to Segro shareholders.

Prior to the most recent offer, large Segro shareholders such as APG Asset Management and CCLA Investment Management pushed for negotiations with Prologis, while Artemis Investment Management and Aegon pulled away from any dealmaking.

While Segro’s board unanimously voted in favor of the terms, the company still needs a formal offer from Prologis. Should the deal culminate, it will be the largest acquisition of a publicly traded landlord in U.K. history.

San Francisco-based Prologis is one of the world’s largest industrial landlords. The firm has executed several major acquisitions in recent years, including a $26 billion buyout of Duke Realty in 2022 and a $13 billion acquisition of Liberty Property Trust in 2020.

— Holden Walter-Warner