Segro Agrees to £14 Billion Takeover by US Rival Prologis
The British warehouse and data centre firm's board has accepted a fourth offer after initially rejecting three bids.
The board of Segro has reversed its opposition to a U.S. takeover, agreeing to a fourth offer from Prologis valued at more than £14 billion. The British industrial real estate company announced its acceptance of the revised bid late Tuesday.
Initially, Segro had rejected three previous offers from Prologis, valuing itself closer to £18 billion. The latest proposal values Segro at 1054 pence per share, amounting to approximately £14.2 billion. This figure surpasses Prologis's initial offer of 925 pence per share, or £12.6 billion, made last month.
Despite the improved offer, the valuation remains below the nearly £18 billion assessment by commercial property experts CBRE, which Segro's board had previously cited as evidence that Prologis was attempting to acquire the company at a reduced price.
Sources indicate that investor discussions influenced the board's change of stance. Some investors reportedly viewed the offer of around 1050 pence per share favorably, considering recent escalations in the Middle East and domestic political uncertainties.
Prologis has committed to establishing a secondary listing for its shares on the London Stock Exchange, a move intended to accommodate the delisting of Segro. The U.S. firm had previously dismissed Segro's 1300 pence valuation as 'unrealistic' before submitting its final offer.
With both companies now in agreement on the price, the deadline for finalizing the deal has been extended from July 22 to August 12. This extension allows for the negotiation and agreement of the remaining terms.
Segro becomes the fifth company listed on the FTSE 100 index to agree to a takeover this year, and the largest among them. Previous companies agreeing to acquisitions include laboratory testing firm Intertek, insurer Beazley, financial services firm Schroders, and energy group DCC. Other companies that have been targets of takeover bids include Easyjet, Rotork, Mitie, and Tate & Lyle, raising concerns about the acquisition of British companies perceived as undervalued on the London stock market by overseas entities.