UK's Segro agrees $19 billion Prologis takeover after investor pressure

Aug 4 (Reuters) - British warehouse landlord ‌Segro has accepted ​a takeover ​offer by rival U.S. logistics firm Prologis in a deal worth up to £14.3 billion ($19.19 billion), the companies said on Tuesday, following pressure from investors.

The ‌deal adds to a record year for mergers and acquisitions in the ⁠UK, and is the second-biggest so far after Unilever's $65 billion food business merger, announced in March. It ‌also ranks among the biggest foreign ‌takeovers of a UK-listed company on record, LSEG data showed.

Segro's shares closed up 1.4% at £9.75, but were still below the agreed takeover price of up to £10.54 per share. ​Prologis shares were down 2.31% during U.S. trading hours.

INVESTORS GET THEIR WAY

Segro, which owns around 10.9 million square metres (117 million sq. ft) of space across Europe, had ⁠rejected three previous approaches from Prologis but said last month that it was minded to back a "best and final proposal".

Investors ​including APG Asset Management, Norges Bank and CCLA Investment Management had urged the companies to engage in talks, saying a combination would be ​valuable.

CCLA, Norges Bank and APG declined to comment ‌on Tuesday.

"Prologis and Segro believe that the combination offers a compelling opportunity to Segro shareholders," the companies said in a statement. As of ⁠Monday, Prologis and Segro had a combined market capitalisation of over $152 billion.

Prologis counts Amazon, FedEx and UPS among its customers, and Prologis and Segro have been building out a data centre pipeline ⁠to tap into the booming AI industry.

AGREED TERMS

The agreed offer comprises 0.0920 Prologis shares, a partial cash ​alternative of up to £3.5 billion, and a potential final dividend, alongside a possible secondary London listing of the combined group, of which Segro shareholders will hold roughly 8.9%.

The offer is at a 42% ‌premium to Segro's closing price on June 23, a day before Prologis went public with its interest. The companies had until August ‌12 to finalise a deal under UK takeover rules.

Evercore, Morgan Stanley, Goldman Sachs and UBS advised ⁠Segro, while Rothschild, J.P. Morgan, Eastdil ‌Secured, Citigroup, and BofA Securities ​advised Prologis.

($1 = 0.7450 pounds)

(Reporting by Prerna Bedi, Pushkala Aripaka, Anushka Chourasia, Nithyashree R B and Shashwat Awasthi in Bengaluru; Editing by Subhranshu Sahu and ‌Susan Fenton)

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Citadel unwinds 80% of Aschenbrenner’s portfolio risk - report
• Bunker Hill Mining to acquire Silver47 in all-share merger deal
• BofA maintains underperform ratings on six BDC stocks