Warehouse landlord Segro has signalled it will recommend a £14bn takeover by US logistics property giant Prologis after the bidder improved its “best and final” proposal.
The FTSE 100 property group’s board unanimously concluded that the revised financial terms were at a level it would be “minded to recommend” to shareholders, provided Prologis proceeds with a formal offer and completes its due diligence.
Under the proposal, Segro investors would receive 0.092 new Prologis shares for each share held, alongside access to a partial cash alternative worth up to £3.5bn, representing 25 per cent of the total consideration.
The offer values Segro at 1,031.7p per share, based on Prologis’ closing share price and exchange rates on 21 July, putting the warehouse group’s equity value at approximately £14bn. This marks a 39 per cent premium to Segro’s share price immediately before Prologis’ interest became public.
Including an expected final dividend of up to 22.56p per share, Segro said shareholders could receive total value of as much as 1,054.3p per share. They would also be entitled to retain an interim dividend of up to 10.14p.
Prologis has also agreed that, should it make a firm offer, it would establish a secondary listing of its shares on the London Stock Exchange by the time the acquisition completes.
The commitment is expected to make the largely share-based deal more attractive to Segro’s UK investors, which would otherwise receive stock in the US-listed property business.
Segro had rejected several earlier approaches from Prologis, arguing they undervalued its portfolio and long-term growth prospects.
Its assets span approximately 10.9 million sq m of warehouse and industrial space across Europe, serving the logistics operations that support retailers and ecommerce businesses.
Major shareholders, including Norges Bank Investment Management and APG Asset Management, had encouraged the companies to continue negotiations.
The deadline for Prologis to make a binding offer or walk away has now been extended from 22 July to 5pm on 12 August.
Segro stressed there remains no certainty that a formal bid will ultimately be made.
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