FTSE 100 listed UK property group Segro has again slammed a £12.6 billion takeover bid from a US rival and says it will not be sold ‘on the cheap’.
Segro owns a portfolio of warehouses and data centres, mainly in the South East of England, and has benefited from the growth of online shopping.
The company recently rejected the all-share bid from Prologis ‘unanimously and unequivocally’ and said it fell ‘a long way short’ of own valuation and was ‘opportunistically timed’.
This morning Prologis issued a response setting out the strategic and financial rationale for the proposed combination.
It pointed to “a substantial upfront premium from joining the new, stronger entity and the world’s leading logistics real estate platform” and “track record of delivering substantial total shareholder returns”.
It added: “Over the past five years, total shareholder returns have equaled 38.6% for Prologis, compared with a 20.1% decline for Segro.
“Prologis’ access to public and private capital will enable Prologis to unlock and accelerate the embedded value of Segro’s development and data centre pipeline which Prologis believes Segro is unable to fully realise on a standalone basis given its balance sheet capacity and persistent trading discount.”
Prologis has a long-standing presence in the UK and Europe, which has grown to £27.8 billion of Assets Under Management since 1997.
However the board of Segro said it “sees a significant value creation opportunity through delivering its current growth strategy which the proposal wholly fails to recognise” and promised to provide more detail on this next week.
“Segro is unique and irreplicable,” it continued. “Segro’s prime portfolio is weighted to urban assets in Europe’s largest, supply-constrained cities. It has been purposely shaped over decades to deliver long-term outperformance.
“Segro’s exceptional logistics, industrial and data centre development pipeline and the scarcity value of its irreplicable portfolio are key drivers of Segro’s fundamental value.
“Segro does not need Prologis to unlock value upside.”
It said Prologis’s proposal is currently worth 881 pence per Segro share, reflecting a 5% decline since the start of the offer period.
“This proposal is inadequate, opportunistic and one-sided… [and] made just as Segro is primed to capitalise on Europe’s substantial data centre growth and as momentum is building in Segro’s industrial and logistics occupier markets.”
Andy Harrison, chairman of Segro, commented: “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.”