Shares in Segro PLC (LSE:SGRO) surged 15.5% to 857p after US giant Prologis Inc (NYSE:PLD) went public with a possible offer for the FTSE 100-listed logistics property group, after its board rejected a £12.6 billion all-share takeover proposal.
The New York-listed warehouse landlord said it wrote to Segro's board on 16 June with an indicative proposal under which Segro shareholders would receive 0.084 new Prologis shares for each Segro share held.
Segro rejected the proposal on Tuesday, 23 June.
Based on Prologis' closing share price on that day and prevailing exchange rates, the proposal values Segro at 925p a share, a 24.6% premium to the closing share price of 742p and matching the group's last reported EPRA net tangible assets per share at the end of 2025.
If completed, Segro shareholders would own about 10.5% of the enlarged group.
In its response, Segro said its board "unanimously and unequivocally" rejected the proposal, arguing that the proposed offer "falls a long way short" of its assessment of the company's value.
Having considered the bid with its advisers, they believe the proposal "was opportunistically timed and sought to take advantage of the clear dislocation between Segro's current share price and its highly attractive underlying business and strong prospects.
"This has been accentuated by major geopolitical issues which have adversely impacted trading valuations across the UK and European real estate sectors relative to the US REIT sector."
Segro said it remained "very confident" in its strategy, balance sheet strength and ability to deliver substantial value for shareholders in the years ahead.
Prologis arguments
Prologis, the world's largest logistics real estate investment trust at a $139 billion market cap and with over 1.2 billion sq ft across 19 countries, said the combination would give Segro investors exposure to a larger global platform while providing access to greater financial resources.
The San Francisco-based company argued that Segro's growth has been constrained by its balance sheet and highlighted its shares have "traded at a persistent discount" to the value of its underlying assets, pointing to its own stronger total shareholder returns over three and five years.
The US group also said its greater financial firepower could unlock "significant embedded value of Segro's development and data centre pipeline in a way that Segro will not be able to do on a standalone basis".
Prologis, which has until 22 July to make a formal offer for Segro, urged shareholders to press the board to engage in talks.
Wider effects
Its announcement gave a boost to the wider sector, with Tritax Big Box REIT PLC (LSE:BBOX) climbing 5.4%, British Land Company PLC (LSE:BLND) 3.2%, Land Securities Group PLC (LSE:LAND) 3% and LondonMetric Property PLC (LSE:LMP) 2.8% among the blue-chips. On the FTSE 250, Big Yellow Group PLC (LSE:BYG) rose 4%, Great Portland Estates (LSE:GPOR) 3.75%, Hammerson PLC (LSE:HMSO) 3.3% and Shaftesbury Capital PLC (LSE:SHB) 3%.
Broker Stifel said: "Segro's current market cap of £10bn represents just under 20% of the entire EPRA UK REIT Index. If Segro were to be taken over, it would represent a serious challenge to the long-term viability of the UK Listed property sector."
** UPDATE: Adds shares prices and broker comment **
