Prologis, a U.S. warehouse property giant, has increased its proposed takeover of Segro (SGRO), the UK's largest publicly traded property company and Europe's biggest logistics landlord, to 13.5 billion, or about $18.2 billion. The revised proposal, delivered on July 16 and rejected the following day, offers 0.089 new Prologis shares for each Segro share and values Segro at roughly 993 pence per share. This represents a 9.7% premium to Segro's June valuation. Prologis also added a partial cash alternative worth as much as 2.7 billion, or $3.6 billion, as it seeks to win support from Segro shareholders after the board rejected the latest terms.
Segro's management continues to argue that its growth strategy and standalone prospects could create greater value for investors. However, the company has left room for further negotiations after the management teams met to assess whether Prologis could improve the financial terms. Prologis did not provide new information or increase the proposal during that meeting, but Segro said it would engage again if a stronger offer emerges. Prologis has also raised the possibility of a secondary London listing for the combined company, although it said such a move would require cooperation from Segro's board.
The latest proposal is Prologis' third approach since last month and follows an all-share transaction proposed in 2024 that Segro also rejected. Prologis believes a combination could give Segro shareholders access to a larger balance sheet, lower capital costs and greater data-center expertise, while Segro says the timing appears designed to take advantage of a share-price decline linked to the Iran war. Stifel analyst John Cahill said pressure may be increasing on Segro's board because the proposal is above book value, although he also noted that Segro appears prepared to defend its independent listing. Segro shares fell as much as 2.3% on Monday and traded near 886 pence, below the proposal's implied value, despite rising more than 19% since Prologis' interest became public. With Prologis facing a July 22 deadline to submit a formal offer or withdraw, investors may focus on whether shareholder pressure leads to improved terms or further negotiations.