FTSE 100 Segro shares rocket as it fights off £12.6bn swoop by US real estate giant
Real estate investment firm Segro has rejected a £12.6bn bid from a US fund looking to combine the two companies into one mammoth investment trust.
Prologis said it had gone public with its offer in a bid to convince Segro shareholders to back the deal.
As part of Prologis’ offer, Segro stocks would be valued at 925p marking a near 25 per cent premium on the firm’s closing share price on Tuesday of 742p.
The blue-chip firm’s stock was up nearly 18 per cent on the news to 872.40, propelling it to the top of the FTSE 100’s risers.
Prologis said the takeover would “unlock embedded opportunities for investment” which it said the firm would be “unable to unlock standalone due to structural constraints, including its balance sheet capacity and trading discount”.
The deal would also result in Segro investors owning around 10.5 per cent of the newly combined global unit.
Prologis revealed Segro’s board “unequivocally” rejected the proposal on June 23.
The UK landlord issued a statement on Wednesday morning branding the offer as falling “a long way short of Segro’s own views on value”.
It accused Prologis offer of being “opportunistically timed and sought to take advantaged of a clear dislocation” between its share price and its “strong prospects”.
Segro becomes next target in foreign M&A offensive
A source close to Prologis said the Segro had been “recycling assets in the UK” and would be unable to fulfil its European expansion ambitions without the backing of the Prologis deal.
As per UK takeover rules, the US fund now has until 5pm on July 22 to make a formal bid or walk away for at least six months.
Segro’s total assets under management sits at £22bn, with a significant portion of its land portfolio slated for data centres.
David Sleath, the trust’s chief executive, told Morning Wire in February the rollout of data centres in the UK’s urban hubs was “critical” for developments on saving lives through AI-guided surgery.
In the last calendar year, the firm delivered a 8.3 per cent jump in profit to £509m.
Prologis’ proposal marks the latest foreign seas bidder looking to snap up an ‘under-value’ London-listed firm.
The City raised the alarm earlier this year on a flurry of unsolicited offers that took the combined value of firms poised to leave Britain’s ailing stock market to £43bn.
Tate & Lyle was snapped up by US rival Ingredion for £2.7bn in a major blow to the London bourse. Blue-chip insurer Beazley and wealth manager Schroders were also plucked off the market following takeovers.