Segro (LSE:SGRO), the UK real estate investment trust focused on warehouses and industrial property, unanimously rejected a further revised takeover proposal from Prologis, the US logistics property giant.
The board concluded that Segro's own growth strategy and standalone prospects offer superior value creation than the terms on the table.
Segro met Prologis management the day after the rejection to test whether the US group could sweeten its terms to a level the board could recommend.
Prologis offered no new information and made no improvement to the proposal at that meeting.
"The Board does not believe that Prologis's latest proposal to acquire Segro reflects the quality, scarcity or long-term prospects of Segro's portfolio and platform and has been rejected unanimously by the Board", said chairman Andy Harrison.
Segro said it remains open to further engagement should Prologis return with a proposal that better reflects the value of its business.
Previously, Segro rejected Prologis' original March 2024 approach as "opportunistic", saying at the time it saw "no merit in the proposed combination."
The third approach
Prologis this morning confirmed it had lodged its latest proposal for the firm, adding a partial cash alternative after its second approach was rejected on 12 July.
Prologis argues Segro's standalone plan depends on flawless execution of a long-dated development pipeline and unrealistic valuation assumptions, including an 8% discount rate it says understates execution risk on speculative, un-zoned land. The would-be buyer also pointed to a revoked data centre entitlement in Paris as evidence that Segro's powered land bank carries risks not reflected in its own valuation, and notes Segro's net asset value fell 2.2% in the first half.
Prologis says Segro's plan to place prime assets, including development land, into a proposed joint venture with PSP at net asset value sits awkwardly with the "cluster" premium Segro claims for the same portfolio.
"Prologis' proposal provides upfront value, greater flexibility and long-term upside opportunity," the group said, contrasting this with what it calls Segro's reliance on third-party funding and an unjustified valuation.
News Intelligence what this means for the company
Segro's board again unanimously rejected Prologis's revised takeover proposal, reiterating that the offer undervalues its portfolio and long-term prospects. Prologis declined to improve terms at a follow-up meeting and now faces a hard deadline of 22 July to announce a firm intention to bid or walk away under City Code rules. The rejection leaves the outcome uncertain: either Prologis will make a materially higher offer in the next two days, or the bid will lapse.
Segro's board confidence in standalone value—underpinned by H1 2026 leasing results showing a 71% year-on-year increase in headline rent secured—suggests management believes organic growth and its development pipeline offer better returns than Prologis's current terms. The imminent deadline creates binary risk: a higher offer would validate the board's valuation stance, but withdrawal would remove takeover premium and leave Segro executing its standalone strategy against a potentially weakened equity backdrop.
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