The UK warehouse company Segro has dramatically changed its stance and now supports a £14 billion takeover by its US-based competitor Prologis. The change came just before a key deadline and followed the rejection of earlier proposals from the American firm. Segro’s board has stated it will recommend shareholders accept Prologis’s latest "best and final offer."
A revised offer and extended deadline
The new deal from Prologis involves exchanging 0.092 of its own shares for every Segro share. That would value each Segro share at £10.32. This offer is 3.9 percent higher than the previous one and a 9.5 percent increase from the first offer in June. Under the terms, Segro shareholders will be eligible for a dividend, and the UK company will seek a secondary listing on the London Stock Exchange. This gives an added layer of stability for investors.
Prologis was initially under pressure to commit to a firm offer or walk away by 5 pm UK time on Wednesday. That was known as a "put up or shut up" deadline. Now the timeline has been extended by three weeks, with the final decision deadline pushed to 5 pm on 12 August. Prologis has confirmed it is open to working with Segro during this extended period to finalize the deal. Earlier in the day, Prologis’s shares dropped by as much as 3 percent in New York, but there was a slight recovery by afternoon trading.
Norway's Norges Bank pushes for engagement
Segro’s board made the announcement just hours after one of its major investors, Norway’s Norges Bank Investment Management, urged the company to negotiate with Prologis. Norges Bank owns an 8.3 percent stake in Segro and a 1.3 percent stake in Prologis. The bank said it recognized the strategic benefits of merging the two companies. This support appears to have played a key role in Segro’s final decision.
Segro traces its history back to the Slough Trading Company, formed in 1920 when a former military repair depot near London was transformed into one of the earliest modern industrial estates. Over the years, Segro expanded its operations and now manages over 10.9 million square meters of industrial space in Europe. Its tenant base has evolved over time, and the Slough estate is now home to one of the world’s largest datacenter portfolios. Both companies have been investing heavily in datacenters to respond to the surging AI market.
A turning tide for UK companies
This deal is part of a larger trend of overseas interest in British businesses. Intertek, another major FTSE 100 company, recently agreed to a £10.6 billion takeover by a private equity firm controlled by Sweden’s Wallenberg family. Additionally, easyJet gave its board backing to a potential £5.7 billion bid from the US-based private equity firm Apollo. However, this airline deal is currently being evaluated for compliance with EU rules on ownership, adding uncertainty.
The UK stock market has faced challenges, with Segro’s shares dropping over 40 percent from their peak during the pandemic. At that time, demand for home deliveries soared, which led to a boom in warehouse and logistics services. The company had previously rejected Prologis's earlier proposals, with CEO David Sleath arguing that Segro could deliver strong long-term value through its development projects. However, with mounting pressure from investors and the revised offer, Segro has now shifted its position.
The UK stock market has become more attractive to foreign buyers in recent months, partly due to the ongoing conflict involving Iran, which has made US stocks less appealing by comparison. Prologis’s final offer for Segro reflects this broader trend and highlights the growing interest in British assets by international investors.
As the new deadline approaches, the deal’s future will depend on Prologis meeting the final terms and receiving regulatory approval. If approved, the transaction would be one of the largest takeovers of a UK-listed company by a foreign buyer. It would also mark a significant shift in the fortunes of Segro and its stakeholders.