Segro, the FTSE 100 target of a £12.6 billion takeover, responded to the US predator Prologis by branding the bid “opportunistic, one-sided and inadequate.” The European warehouse and data centre landlord argues the 925p-per-share offer undervalues the company because it does not account for potential rental income increases exceeding £1 billion in the coming years.
Defence strategy and valuation
The group has outlined a counter-valuation of approximately £13 per share from the commercial property firm CBRE, which would place the total value near £18 billion. Segro also announced a joint venture to develop a data centre in Paris and highlighted a significant rise in rents during the first half of the year. Chief executive David Sleath described the portfolio of sites as “irreplicable,” noting the company’s 100-year history and strong local market presence. He added that the group sees “tremendous two-pronged upside” from industrial and logistics development, alongside opportunities in data centres where supply is scarce.
The defence strategy relies on the argument that Prologis is attempting to acquire the company after shares fell following the outbreak of war in Iran. While the bid offers a 25 per cent premium over the closing price, the figure looks much smaller when compared to the 841.2p share price at the end of February or the 742p level just before the approach was disclosed last month.
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Investor reaction and market context
Segro shares fell 1.8 per cent, or 16p, to 865p in early trading. One top-ten investor told the Financial Times that if Prologis succeeds at the offered price, the American suitor would look like a “highway robber.” This deal comes as the latest in a series of FTSE 100 targets this year, following acquisitions of City institution Schroders, Lloyd’s of London insurer Beazley, and lab testing group Intertek.
The market reaction to such offers often reveals a tension between immediate shareholder returns and the long-term strategic value of established assets. In similar corporate battles, companies with unique geographical footprints or long-standing operational platforms frequently withstand lower offers because investors recognize the difficulty of replicating such specific infrastructure. Segro has not ruled out a takeover at any cost, with Sleath stating they would “react accordingly if something came back at a more attractive level.”
Analysts suggest the disparity in valuation stems from differing views on future growth. Prologis, a major player in the US industrial logistics market, may be applying a lower discount rate to Segro’s assets compared to domestic valuations. The rejection of the bid by Segro’s management signals a confidence in the durability of their income streams, particularly in the logistics sector which continues to expand despite broader economic fluctuations. The upcoming joint venture in Paris further demonstrates Segro’s commitment to expanding its physical footprint, reinforcing the argument that the offer price fails to capture the full potential of its European operations.
