Prologis, said talks with SEGRO (LSE:SGRO) failed to produce a credible path towards a transaction the SEGRO board could recommend.
Senior Prologis representatives met SEGRO management in London on Sunday, days after submitting a revised proposal, but the session was meant to test whether progress was possible rather than table a fresh offer.
"We were disappointed that the discussion did not provide meaningful clarity", Prologis said.
The impasse centres on valuation. Prologis said its view of SEGRO is grounded in the quality of the real estate and long-term performance expectations. SEGRO's total property portfolio was valued at £19 billion as at 31 December, with £16.7 billion of completed assets carrying an EPRA net initial yield of 4.2%. Prologis pointed to the UK 10-year Gilt yield rising to 5.04% at Wednesday's close, a gap it frames as evidence that SEGRO's aspirational valuation has drifted from prevailing market conditions.
Under Takeover Panel rules, Prologis must by 5pm on 22 July either announce a firm intention to make an offer or walk away, a deadline that can only be extended with Panel consent.
"There can be no certainty that an offer for SEGRO will be made", the statement said.
News Intelligence what this means for the company
Prologis and SEGRO remain deadlocked on valuation after Sunday talks produced no progress toward a recommendable offer. With a Takeover Panel deadline of 5pm on 22 July to announce firm intent or withdraw. The impasse hinges on SEGRO's portfolio valuation: Prologis argues that the UK 10-year Gilt yield rising to 5.04% has moved market conditions away from SEGRO's asking price, while SEGRO's board has rejected successive proposals as undervalued.
A stalled takeover would remove a near-term catalyst and leave SEGRO trading as a standalone logistics REIT facing a valuation gap with its suitor. If Prologis walks away by 22 July, SEGRO's share price will likely face downward pressure absent a competing bid, and the company will need to execute on operational momentum, H1 2026 headline new rent of £53m, up 71% year-on-year, to justify its current valuation in a higher-rate environment.
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