Segro board U-turns on £14bn takeover bid by US rival Prologis

Prologis has until 12 August to make a firm offer to buy Segro, in what would be one of the largest foreign takeovers of a UK-listed company. Photograph: Education Images/Universal Images Group/Getty Images View image in fullscreen Prologis has until 12 August to make a firm offer to buy Segro, in what would be one of the largest foreign takeovers of a UK-listed company. Photograph: Education Images/Universal Images Group/Getty Images Segro board U-turns on £14bn takeover bid by US rival Prologis UK warehouse landlord says board unanimous in recommendation to accept ‘best and final offer’ The board of the UK warehouse landlord Segro has U-turned and said it would be willing to accept a £14bn takeover by Segro’s bigger US rival, Prologis, in a deal that would be one of the largest foreign takeovers of a UK-listed company. In the latest blow to the troubled London stock market, Segro said in a statement that its board had “unanimously concluded” it would recommend its shareholders accept what Prologis called its “best and final offer”, made just hours before a deadline. The statement on Wednesday afternoon, issued after the stock market closed, came nearly a month after the FTSE 100 company’s board, which builds and rents out enormous warehouses to companies like Amazon and Netflix, rejected an initial £12.6bn approach from Prologis and two subsequent offers. Prologis’s revised proposal offered 0.092 new shares for each Segro share, valuing the UK company at £10.32 per share. This represents 3.9% more than its previous proposal and a 9.5% increase above its initial approach disclosed in June. Under the terms of the deal, Segro shareholders would also be entitled to receive a permitted dividend, while the company has also asked Prologis to commit to establishing a secondary listing for Segro on the London Stock Exchange. Prologis had until 5pm UK time on Wednesday to announce a firm intention to make an offer or walk away, known as a “put up or shut up” (PUSU) deadline under the UK’s takeover code. This deadline has now been extended by three weeks, and California-based Prologis has until 5pm on 12 August to make a firm offer. Prologis said it welcomed the additional time and was willing to work with the Segro board to reach an outcome. Its shares fell by as much as 3% during morning trading in New York, before recovering slightly. Segro’s about-turn came just hours after one of its major investors, Norway’s Norges Bank Investment Management, had urged the UK company to engage with Prologis. Norges, which had a 1.3% holding in Prologis and an 8.3% holding in Segro at the end of June, said it understood “the strategic rationale for a combination”. Segro stands for the Slough Estates Group, after the town on the western fringes of London where it began life as the Slough Trading Company in 1920, when a military repair depot was turned into an early example of a modern industrial estate . Segro now owns 10.9 million square metres of space across Europe