SEGRO has rejected a further revised takeover proposal from Prologis, arguing that the terms fail to reflect the quality of its portfolio, the scarcity of its platform and the value of its long-term growth prospects.

The latest proposal, received on 17 July 2026, would offer SEGRO shareholders 0.0890 new Prologis shares for each SEGRO share. It also includes a partial cash alternative of up to £2.7bn, equivalent to 20% of the total consideration.

Based on Prologis’s closing share price of $149.80 and a sterling-dollar exchange rate of $1.35 on 17 July, SEGRO said the proposal valued each of its shares at 993p, assuming shareholders elected in full for the available cash element. Using Prologis’s three-month volume-weighted average share price, the implied value falls to 958p per SEGRO share.

The proposal represents Prologis’s third approach. Its initial offer used an exchange ratio of 0.0840 Prologis shares for each SEGRO share, which was subsequently increased to 0.0875 before the latest improvement to 0.0890.

SEGRO’s board unanimously rejected the revised terms after concluding that the company’s standalone strategy offered shareholders superior value creation. However, it subsequently met with Prologis’s management to establish whether the US logistics property group was prepared to improve its offer to a level that could secure a recommendation.

SEGRO said Prologis provided no new information at that meeting and made no improvement to the financial terms. The board nevertheless indicated that it remains willing to engage should Prologis return with a proposal that more appropriately reflects SEGRO’s prospects.

The company also disclosed that Prologis had made an unsolicited approach in March 2024. That proposal was rejected because it represented a premium of only around 10% to SEGRO’s prevailing share price and, in the board’s view, failed to recognise the strength of its standalone prospects. By July 2024, following SEGRO’s relative share price outperformance, the value of that earlier proposal had fallen below its market price.

SEGRO believes the latest approaches have been timed to take advantage of a depressed share price just as conditions in its markets are beginning to improve. The board argues that accepting the proposal would transfer the benefit of the company’s embedded development value and accelerating operational momentum to Prologis shareholders before these are fully reflected in SEGRO’s earnings and valuation.

Chairman Andy Harrison said the latest proposal did not recognise the “quality, scarcity or long-term prospects” of SEGRO’s portfolio and platform. He added that the board was focused on maximising shareholder value and would consider any improved proposal that properly reflected the value and prospects of the business.

SEGRO has urged shareholders to take no action in relation to Prologis’s proposal.

SEGRO sets out standalone value case

In defending its standalone strategy, SEGRO argued that shareholders would be better served by retaining full exposure to the company’s growth prospects than accepting Prologis’s latest proposal.

The company said its portfolio, development pipeline and data centre platform could deliver substantial rental income, earnings growth and capital appreciation. It highlighted a record £90m current and near-term development pipeline, improving occupier demand and a 3.0GVA European power bank that it believes gives it a strategically valuable position in the data centre market.

SEGRO estimates that its industrial, logistics and allocated data centre pipelines could generate around £900m of potential future rental income and create £4.1bn of additional shareholder value. It expects adjusted earnings per share to rise from 36.6p in 2025 to around 50p by 2030, with data centres forecast to contribute more than 30% of net rental income by 2035, compared with 7% currently.

The company also argued that it has the financial capacity to fund its growth without issuing new equity. It expects loan-to-value to remain in the low-30% range and net debt-to-EBITDA below six times, supported by asset sales, joint ventures and access to external capital. SEGRO said it had completed or exchanged on £308m of disposals so far in 2026 at prices above book value.

SEGRO described Prologis’s approach as opportunistic, saying it had been made during a period of temporary share-price weakness. It argued that the latest proposal represented premiums of only 18% and 14% respectively to its share price before the outbreak of conflict in the Middle East, depending on whether Prologis’s spot or three-month average share price was used.

The board said SEGRO shareholders would exchange full ownership of a differentiated European logistics and data centre platform for an interest of only around 9% in the enlarged Prologis group. It added that the proposal did not adequately compensate shareholders for handing over SEGRO’s development upside, portfolio clusters, debt benefits and potential takeover synergies.

SEGRO valued its development pipeline alone at no less than £3.3bn, equivalent to 242p per share on a discounted basis. It identified a further £2.2bn, or 164p per share, of value that could accrue to an acquirer through factors including cluster benefits, avoided real estate transfer taxes and the mark-to-market value of SEGRO’s debt.

The board concluded that Prologis’s proposal would not accelerate the delivery of SEGRO’s strategy but would instead transfer the bulk of its embedded upside to Prologis shareholders. It reiterated that it remained willing to consider a higher proposal that properly reflected the value and prospects of the business.

Prologis challenges SEGRO’s valuation case

Prologis has responded to SEGRO’s defence this morning by arguing that the board’s standalone valuation case rests on overly optimistic assumptions and does not reflect the returns currently available from the company’s completed property portfolio.

The US logistics group said its meeting with SEGRO management on Sunday was intended to establish whether there was a credible route to a recommended transaction, rather than to present another improved proposal. Prologis said the discussions failed to provide sufficient clarity on what would be required to make further progress.

Prologis questioned SEGRO’s assertion that its share price weakness represents a temporary market dislocation. It noted that SEGRO’s net asset value fell from 925p to 905p per share during the six months to 30 June 2026 and argued that the company’s long-standing discount to NAV reflects modest forecast earnings growth rather than short-term market factors.

According to Prologis, consensus forecasts imply annual earnings growth of around 4.7% over the next three years, rising to 6.4% through to 2030 based on SEGRO’s target of approximately 50p of earnings per share. It said these growth rates were insufficient to support a return to NAV, particularly given that £16.7bn of SEGRO’s completed assets were valued at a 4.2% EPRA net initial yield, against a UK ten-year gilt yield of 5.04% at 20 July 2026.

Prologis said the see-through value of its proposal, at 993p per SEGRO share, represented a 9.7% premium to SEGRO’s latest adjusted NAV of 905p. It claimed this would rank among the highest premiums to NAV paid for a UK property company over the past decade, while also allowing SEGRO shareholders to participate in what it described as Prologis’s stronger earnings growth, liquidity and valuation rating.

It also challenged the development values and earnings forecasts presented by SEGRO. Prologis argued that, even if SEGRO reaches earnings of 50p per share in 2030 and retains its undisturbed price-to-earnings multiple of 19.3 times, this would imply a share price of 964p in four years’ time, below the value of its current proposal.

Prologis further claimed that SEGRO shareholders were 36.5% worse off as a result of the board’s decision to reject its March 2024 approach and warned that the board risked repeating the same mistake.

Despite its criticism, Prologis said it remained willing to engage constructively. However, it reiterated the importance of disciplined capital allocation and stressed that there remained no certainty that a formal offer would be made.

Matthew Read, senior analyst at QuotedData, said: “The latest batch of exchanges has not changed our view that Prologis’s bid feels opportunistic in nature and asks SEGRO shareholders to hand over what could be a good amount of potential upside in exchange for a relatively small interest in the enlarged group. We therefore still believe that SEGRO’s board is right to push for a higher price that it believes more fairly reflects both the quality of the existing portfolio and the growth that has yet to come through.”

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