Warehouse giant Prologis takes $16.6 billion bid for UK’s Segro public after rejection

U.S. logistics firm Prologis on Wednesday made public its £12.6 billion ($16.62 billion) takeover proposal for Britain's Segro after the warehouse landlord rejected its approach, seeking to build pressure on the board to engage.

The approach marks the latest attempt by a foreign firm to acquire a London-listed company as weaker valuations attract buyers with deeper pockets, putting Britain on course to outstrip all previous records for dealmaking in 2026.

It also comes days after Castlelake took its easyJet bid public after being rebuffed three times.

Prologis says FTSE 100-listed Segro has traded at a persistent discount to its net asset value and faces constraints that prevent it from unlocking value in its development and data centre pipeline, spurred by the rapid growth of AI.

"Prologis urges Segro shareholders to encourage the Segro board to engage with Prologis to allow a binding offer to be put to Segro shareholders for their consideration," Prologis said in a statement disclosing its all-share proposal.

Shares in Segro surged more than 20% to 892 pence each, hitting their highest since September 2024.

Segro said in a statement that its board has "unanimously and unequivocally rejected the proposal, which falls a long way short of Segro's own views on value". The company called Prologis' bid "opportunistically timed".

NO PREMIUM TO BOOK VALUE

Prologis is offering Segro shareholders 0.084 new shares for each share they hold, with an implied value of 925 pence apiece, a roughly 25% premium to Segro's closing price on Tuesday. However, that is in line with Segro's last reported book value.

Blackstone's takeover of Warehouse REIT last year was at a discount to its book value, while British healthcare real estate investment trust Primary Health Properties and rival Assura's merger was completed at a modest premium.

"In our view Prologis would be reluctant to increase the offer materially and take it above NAV," Oli Creasey, head of property research at Quilter Cheviot, said.

Segro and Prologis overlap heavily in core European logistics markets, including the UK, France and Germany.

Panmure Liberum analyst Bjorn Zietsman in a note questioned whether Prologis' current proposal "adequately compensates shareholders" for future earnings growth and returns available, and Segro's various assets.

Prologis has a track record of snapping up warehouse-focused REITs and maximizing returns, including about 39% from Duke Realty, 97% from Liberty Property Trust and 166% from DCT Industrial since the respective deals were announced.

Under British takeover rules, Prologis must make a formal offer for Segro before a July 22 deadline or walk away.