Prologis can clearly raise its bid for Segro after rejection, analysts say

M&A · Partnership

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Summary · why it matters

Analysts say Prologis clearly has the capacity to improve its all-share takeover offer for Segro after the UK logistics property group rejected an initial £12.6 billion approach. The US giant’s proposal valued Segro at 925p a share, a 24.6% premium to the undisturbed price and roughly in line with last reported net asset value, but Segro’s board dismissed it as opportunistically timed and falling a long way short of the company’s worth. Stifel analyst John Cahill noted that with a market value of around $139 billion, an improved offer is clearly possible, while AJ Bell’s Dan Coatsworth said making the bid public suggests it is just an opening salvo. Panmure Liberum’s Bjorn Zietsman argued any offer must compensate for future returns from Segro’s development pipeline, urban logistics portfolio, power infrastructure and emerging data centre operations, a view he said Prologis’s own rationale appears to support. Peel Hunt’s Matthew Saperia added that the latent value in the pipeline alone warrants a premium valuation, making the current terms unattractive.