Prologis has raised its takeover proposal for SEGRO (SGRO), introducing a £2.7bn partial cash alternative as part of a third proposal that values the UK warehouse landlord at around £13.5bn.
The US logistics property group’s latest proposal, submitted on 16 July and rejected by SEGRO’s board the following day, offers shareholders 0.0890 new Prologis shares for each SEGRO share – a 6% increase on its initial approach announced last month.
The revised terms also include a partial cash alternative worth up to £2.7bn, equivalent to around 20% of the total consideration. Shareholders electing for the full basic cash entitlement would receive 200p in cash and 0.0712 new Prologis shares per SEGRO share.
Based on Prologis’ closing share price on 17 July and prevailing exchange rates, the proposal values SEGRO at 993p per share. Prologis said this represents a 9.7% premium to its pro forma adjusted NAV at 30 June and a 33.8% premium to its share price on 23 June.
Following completion, existing SEGRO shareholders would own around 9.2% of the enlarged Prologis, assuming the partial cash option is fully taken up.
Prologis also said it would explore a secondary listing of its shares in London following completion, subject to sufficient investor demand and engagement from the SEGRO board.
The latest proposal follows a second offer made on 10 July, which was rejected on 12 July.
In its statement, Prologis argued that the revised proposal offers shareholders greater certainty of value than SEGRO’s standalone strategy and pointed to its own second-quarter results, including 8.5% net operating income growth and an 11.6% increase in core funds from operations per share, as evidence of the benefits shareholders would gain from owning Prologis stock.
The US group also renewed its criticism of SEGRO’s defence of its standalone valuation, arguing that the company’s assumptions over future development value are too optimistic.
In response to Prologis’s previous offer, SEGRO presented a value bridge to 1,147p of standalone value and potential ‘strategic worth’ of 1,311p. Buyer synergies could add further upside, it added.
SEGRO’s management also set out more than £1bn of incremental rental income potential and a route to adjusted EPS of 50p by 2030 (from 36.6p in 2025) drawing on the existing portfolio, new industrial and logistics developments, and data centre projects.
Prologis said SEGRO’s valuation relies on an 8% discount rate that understates execution risk and financing costs for speculative, long-dated development projects. It also highlighted the recent revocation of planning entitlements for a Paris data centre site as evidence that parts of SEGRO’s powered land bank face material risks that it believes are not fully reflected in the company’s valuation.
Prologis also noted that SEGRO’s reported NAV fell 2.2% during the first half of 2026 and said shareholders were being asked to reject an immediate premium in favour of value dependent on successful execution of a large development pipeline, third-party funding and leadership succession.
The latest rejection continues a pattern of resistance from SEGRO’s board. Prologis said it made an all-share proposal in March 2024 valuing SEGRO at 963p per share, which the UK company rejected as “opportunistic”, saying it saw “no merit” in a combination and was not seeking a sale. Prologis claims shareholders would have been 36.5% better off had that proposal ultimately proceeded.
Under UK takeover rules, Prologis must announce a firm intention to make an offer under Rule 2.7 or walk away by 22 July, unless the UK Takeover Panel agrees to extend the deadline.
Richard Williams, senior analyst at QuotedData, said: “SEGRO’s board appears determined to not let the company go on the cheap, which is to be admired. The most recent Prologis offer is at superior terms, including a cash element, but still falls short of what we would consider fair value. It argues that SEGRO’s assumptions on future development potential are too optimistic, and its execution capabilities may improve deliverability, but the trade-off for SEGRO shareholders is sharing potential upside across a much larger shareholder base. It still feels too much upside will be given up to Prologis.”
