SEGRO REJECTS £12.6BN TAKEOVER OFFER FROM US RIVAL PROLOGIS

Segro, a FTSE 100 warehouse landlord, has rejected a £12.6bn takeover approach from US competitor Prologis. Segro's board unanimously turned down the all-share proposal on Tuesday, stating it "falls a long way short" of the company's valuation. Prologis subsequently made its offer public in an attempt to appeal directly to Segro shareholders. The US firm valued each Segro share at 925p, representing a 24.6% premium to Segro's closing price on the day of rejection.

Segro develops and lets large warehouses primarily to online retail and technology companies, including Amazon and Netflix. The company's shares rose as much as 15% in early trading following the announcement, reaching 875p and becoming the top performer on the FTSE 100. Segro stated that Prologis's approach was "opportunistically timed" and designed to exploit the gap between its current share price and the firm's underlying business value. The company attributed recent share price declines partly to geopolitical issues affecting UK and European real estate valuations relative to US counterparts.

Segro's business expanded substantially during the Covid-19 pandemic when demand for warehouse space surged due to increased online shopping. However, share prices began declining from spring 2022 and have fallen approximately 40% from their peak at the end of 2021. Oli Creasey, head of property research at wealth manager Quilter Cheviot, suggested that Prologis's proposal could trigger significant activity within the UK real estate investment trust sector.