FTSE 100 property giant Segro rejects third takeover bid from US rival Prologis

FTSE 100 property giant Segro has rejected a second and third takeover bid from US rival Prologis, escalating the tussle between the two real estate firms.

Segro boss David Sleath has publicly criticised Prologis' takeover approach.

The latest bid, rejected last week, amounted to £9.93 per share, valuing Segro's total shares at £13.5bn. Prologis said its offer proposed to exchange 0.0890 of its own shares for each Segro share, alongside £2.7bn in cash. This represented a 9.7% premium on Segro's share price, according to Prologis.

Dispute Over Valuation

Prologis hit back at Segro's insistence that it is being undervalued, calling Segro's own valuation "unrealistic." The US firm argued that Segro has understated the risks of its "speculative, long-dated, often un-zoned and untenanted development projects."

Prologis also criticised Segro for rejecting a historical takeover offer dating back to March 2024, claiming that shareholders in the FTSE 100 firm would be 36.5% better off today had that offer been accepted.

Data Centre Disagreement

The dispute centres on the two firms' data centre estates, with each arguing that its own portfolio is more valuable.

Earlier this month, Segro chief executive David Sleath told investors that Prologis' plan would swap full ownership of Segro's data centre pipeline with a "materially lower shareholding in a different, more US-focused portfolio."

Prologis responded the following day, telling Segro shareholders that it offers a "more experienced, larger and better-capitalised data centre platform."

Potential London Listing

Prologis also said it is considering setting up a secondary listing of its own shares on the London Stock Exchange.

The US firm stated: "Prologis' proposal provides upfront value, greater flexibility and long-term upside opportunity. Segro's standalone plan relies on flawless execution of a significant, long-dated development pipeline, substantial third-party funding and an unjustified valuation."

Analyst Views and Outlook

Analysts at investment firm Stifel said they expect the two parties could agree on a 1,110p per share offer. However, they warned that Segro's management is "well able to realise the value inherent in its portfolio."

Stifel added that a sale would "have significantly negative implications for the very survival" of the UK-listed real estate investment sector.

A person close to the matter said they expect Prologis to pursue Segro "quite aggressively."

"In their heart [Prologis] are American entrepreneurs. Once they've seen something and they want it, that's it really. I see no way that this doesn't get incredibly messy at some point," they added.