The transatlantic takeover wars have found their latest prize: Segro, the British warehouse giant that built its fortune on the explosion of online shopping, just watched its American rival Prologis launch a hostile bid worth 12.6 billion pounds.
Prologis went straight to shareholders after Segro's board flatly rejected the offer on Tuesday. The all-share proposal would have given Segro shareholders 0.084 Prologis shares for each share they owned, valuing each Segro share at 925 pence. That represented a 24.6% premium to the closing price that same day, yet Segro's board called it nowhere near good enough.
Segro responded with a statement saying the bid "falls a long way short" of its own assessment of what the company is worth. The board unanimously rejected what it called an "opportunistically timed" approach, suggesting Prologis was trying to exploit a sharp gap between Segro's depressed share price and the underlying strength of its operations.
The market took notice. Segro shares jumped as much as 15% in early trading Wednesday, hitting 875 pence and topping the FTSE 100's gainers list.
Segro built its name warehousing the infrastructure of modern e-commerce. During the pandemic lockdowns, as consumers flooded online retailers with orders, the demand for massive fulfillment centers went through the roof. Amazon, Netflix, and countless other companies rented Segro's sprawling sheds. The company's stock soared with the trend, peaking at the end of 2021.
Then reality shifted. Starting in spring 2022, Segro shares began a long slide downward. Today they trade roughly 40% below their 2021 high, battered by rising interest rates, inflation concerns, and a pullback in real estate valuations across Europe and the UK.
Segro's board argues that geopolitical turmoil and a sector-wide valuation discount relative to American real estate trusts have created an artificial gap between its share price and its genuine business prospects. The company points to its development pipeline as reason for confidence, particularly a growing collection of data centers that now house the world's second-largest portfolio.
That data center portfolio is precisely what caught Prologis's eye. The US logistics giant, which owns and manages massive warehouse networks, sees strategic value in combining forces with a competitor that has positioned itself at the intersection of physical logistics and digital infrastructure.
Prologis may need to sweeten the bid if it wants to win over reluctant shareholders or force Segro's hand. Oli Creasey, head of property research at Quilter Cheviot, said the American suitor would likely resist a material increase in its offer, but warned that a successful takeover would reverberate through the entire UK real estate investment trust sector, potentially opening other major names to foreign acquisition.
Dan Coatsworth, head of markets at broker AJ Bell, framed the stakes more broadly. "Should Prologis succeed with its pursuit, it would represent yet another large-cap loss from the UK market and a diminution in its breadth and quality," he said.
Segro traces its roots to 1920, when a military repair depot in Slough, a town west of London, was converted into Britain's first modern industrial estate. The Slough Trading Company eventually renamed itself Segro, but its identity remained tied to that modest beginning. Over a century, it evolved from managing traditional manufacturing space into a dominant force in the modern digital economy.
Author James Rodriguez: "Another trophy UK company on the auction block, and another test of whether London can hold onto its assets when valuations lag behind fundamentals."
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