Segro Board Accepts £14bn Prologis Takeover Offer

The board of UK warehouse landlord Segro has unanimously recommended shareholders accept a £14 billion takeover offer from its larger US rival, Prologis, marking one of the largest foreign acquisitions of a UK-listed company [1]. The decision follows nearly a month of rejected proposals and comes amid a broader trend of overseas bids for British firms.

Segro Reversal and Deal Terms

Segro's board, which had previously rejected an initial £12.6 billion approach and two subsequent offers, reversed its stance just hours before a "put up or shut up" deadline [1]. The revised proposal from Prologis offers 0.092 new shares for each Segro share, valuing the UK company at £10.32 per share. This represents a 3.9% increase over Prologis's previous proposal and a 9.5% increase from its initial June approach [1]. Segro shareholders are also set to receive a permitted dividend, and the company has requested Prologis commit to establishing a secondary listing for Segro on the London Stock Exchange [1].

The deadline for Prologis to make a firm offer has been extended by three weeks, to 5pm on August 12 [1]. Prologis, based in California, stated it welcomed the additional time to work with Segro's board [1]. Its shares initially fell by as much as 3% during morning trading in New York before recovering slightly [1]. Segro's change of heart followed a push from major investor Norges Bank Investment Management, which held an 8.3% stake in Segro and a 1.3% stake in Prologis at the end of June, stating it understood the "strategic rationale for a combination" [1].

Broader Market Context

The proposed acquisition highlights a trend of overseas companies targeting British firms, with UK stocks becoming comparatively cheaper than their US counterparts since the start of the Iran conflict [1]. Segro's shares had fallen approximately 40% from their peak in spring 2022 before news of Prologis's initial offer emerged in June [1]. Other recent examples include laboratory testing company Intertek agreeing to a £10.6 billion takeover by a private equity firm, and low-cost airline easyJet considering a potential £5.7 billion offer from a US private equity firm [1]. Sweetener and ingredients firm Tate & Lyle also recently agreed to a £2.7 billion takeover by US rival Ingredion Incorporated [2].

Segro, which began as the Slough Trading Company in 1920, now owns 10.9 million square meters of space across Europe [1]. Its Slough trading estate hosts the second-largest portfolio of data centers globally [1]. Both Segro and Prologis, whose customers include Amazon, FedEx, and UPS, have been expanding their data center operations to capitalize on the growing AI industry [1].

What to watch

• Prologis Firm Offer Deadline: Monitor whether Prologis makes a firm offer by the extended deadline of 5pm UK time on August 12 [1].
• Secondary London Listing: Observe if Prologis commits to establishing a secondary listing for Segro on the London Stock Exchange as requested [1].
• Shareholder Vote: Track the outcome of the shareholder vote on the proposed takeover, following the board's recommendation [1].

The Segro acquisition underscores the ongoing attractiveness of UK-listed companies to foreign buyers, particularly in sectors like logistics and data centers that are benefiting from e-commerce and AI growth.