Segro backs £14bn Prologis bid as UK M&A wave accelerates
The UK warehouse landlord’s reversal on the US group's offer highlights the relentless foreign appetite for undervalued British industrial assets.
Segro’s board has abandoned its resistance and agreed to recommend a £14bn takeover by US rival Prologis, marking one of the largest foreign acquisitions of a UK-listed company.
The revised proposal offers 0.092 new Prologis shares for each Segro share, valuing the target at £10.32 per share. This represents a 3.9% premium over Prologis’s previous bid and a 9.5% increase above its initial approach in June. Shareholders will receive a permitted dividend, while Segro has asked Prologis to establish a secondary listing in London to maintain a domestic footprint.
The about-turn came just hours before a Wednesday deadline under the UK takeover code, which has now been extended to August 12. It followed direct pressure from Norges Bank Investment Management, which holds an 8.3% stake in Segro and a 1.3% stake in Prologis. The Norwegian fund stated it understood “the strategic rationale for a combination,” breaking the board’s previous united front.
For Prologis, acquiring Segro’s 10.9m sq m European footprint secures critical logistics and digital infrastructure. Both companies count Amazon and Netflix as tenants, and Segro’s Slough trading estate now hosts the second largest portfolio of datacentres globally. This positioning is highly valuable as both landlords build out capacity for the artificial intelligence boom, though Prologis shares fell as much as 3% in early New York trading before paring losses.
Segro’s chief executive David Sleath had previously dismissed the overtures as “opportunistically timed,” citing a strong development pipeline. Yet Segro shares had slumped roughly 40% from their 2022 pandemic peak before the initial bid emerged, making the premium difficult for investors to refuse.
The board’s reversal adds momentum to a widening exodus of UK blue-chips accepting foreign bids. British equities have become notably cheaper compared to US counterparts, a trend exacerbated since the start of the Iran conflict. Laboratory testing firm Intertek recently backed a £10.6bn private equity takeover, and easyJet has greenlit a potential £5.7bn approach from Apollo, signalling that UK boards are increasingly conceding to the reality of foreign valuation premiums.
