Prologis has raised its takeover proposal for SEGRO (SGRO), submitting what it described as its “best and final” offer valuing the UK logistics property company at around £14bn while asking for more time to negotiate a recommended deal.
The revised proposal increases the share exchange ratio to 0.0920 new Prologis shares for each SEGRO share – up from 0.0890 shares under the previous proposal announced earlier this week and 9.5% above its original approach disclosed in June.
It has also increased the size of its partial cash alternative to £3.5bn, representing 25% of the total consideration, compared with £2.7bn previously. The cash option is offered at a fixed value of 1,031.7 pence per SEGRO share, subject to pro-rata scaling back.
Based on Prologis’ closing share price on July 21 and prevailing exchange rates, the proposal values SEGRO at around £14bn and each share at 1,031.7 pence, representing a 14.0% premium to SEGRO’s pro forma adjusted net asset value of 905 pence per share at 30 June, and a 39.0% premium to its closing share price on 23 June.
Assuming the partial cash alternative is fully taken up, existing SEGRO shareholders would own around 8.9% of the enlarged Prologis, slightly lower than under the previous proposal because of the increased cash component.
Prologis said the proposal is “best and final” and will not be increased unless a competing bidder emerges.
Alongside the revised financial terms, Prologis has asked SEGRO to seek an extension from the UK Takeover Panel to the current “put up or shut up” deadline of 5pm today (22 July), arguing that additional time is needed to agree the remaining terms of a recommended offer. It also confirmed that SEGRO shareholders would continue to receive dividends up to agreed levels without any reduction in the offer value.
The latest proposal follows a series of approaches by Prologis. Earlier this week, the US group raised its offer to 0.0890 Prologis shares per SEGRO share and introduced a £2.7bn partial cash alternative valuing SEGRO at 993 pence per share. That third proposal was rejected by SEGRO’s board a day after it was submitted.
Prologis has repeatedly argued that its proposal offers shareholders greater certainty of value than SEGRO’s standalone strategy, while criticising the UK company’s assumptions about the value of its development pipeline and data centre ambitions. It has also pointed to its own operational performance and global logistics platform as reasons why a combination would create greater long-term value.
SEGRO has so far resisted the approaches, having also rejected an earlier proposal in July and an all-share proposal made by Prologis in 2024, arguing previously that the approaches undervalued the company and its long-term prospects.
Richard Williams, senior analyst at QuotedData, said: “SEGRO’s board has come under pressure to make a deal with Prologis by some of its largest shareholders in recent days, and this fresh offer (at a 14% premium to NAV and 39% premium to its share price before negotiations were revealed) may well settle it in favour of the US warehouse behemoth. A larger exchange ratio and cash element will be well received, and although SEGRO has argued it has a clear valuation route to £13 per share, investors may well be tempted by ‘jam today’ rather than the promise of ‘jam tomorrow’.”
