The board of SEGRO has described Prologis’s takeover proposal as ‘inadequate, opportunistic and one-sided’ after the US developer started to ramp up the pressure on the UK’s biggest REIT.
Last week, Prologis tabled the possibility of launching a £12.6bn all-share offer for SEGRO, which was unanimously and unequivocally rejected by the company’s board.
Earlier today, the US company published an investor presentation setting out the strategic and financial rationale for the proposed combination and the value Prologis believes it could create for SEGRO shareholders.
In its response to the presentation, SEGRO’s board said Prologis’s proposal is currently worth 881p per SEGRO share, reflecting a 5% decline since the start of the offer period, and fails to reflect the future income and value from SEGRO’s logistics development and data centre pipeline.
It added the proposal was timed at a period of share price “dislocation” following the Middle East conflict, prior to which the proposal would have implied only a 6% headline premium to SEGRO’s share price. The company also said the proposal disproportionately transfers value away from SEGRO to Prologis shareholders with SEGRO shareholders seeing diluted returns.
SEGRO said it would provide more detail on its growth strategy and value, including its development pipeline and data centre strategy, in an update to shareholders next week.
Andy Harrison, chairman of SEGRO, said: “There is nothing in Prologis’s announcement and presentation issued this morning that changes the board’s clear position. Prologis is trying to acquire SEGRO on the cheap when our share price has been dislocated by the Middle East conflict and at a price that reflects none of the quality, scarcity and growth embedded in the business.
“We have unanimously rejected their proposal because we continue to believe our compelling standalone investment case can deliver superior shareholder value. Capital is not a constraint on our ability to unlock all of this value for our shareholders. We look forward to providing more detail on our growth strategy and value case next week.”
