FTSE 100 Segro agrees to £14bn takeover by Prologis
FTSE 100 property firm Segro has agreed to a £14bn takeover by Prologis, bringing an end to a long tussle between the two real estate giants and striking another blow to the London Stock Exchange.
The US-based commercial landowner said on Tuesday that it has reached an agreement with Segro’s board which values the British firm at £14.3bn.
The takeover will complete in the first half of next year, and will see Segro shareholders receive 0.92 Prologis shares for each Segro share, with a partial cash alternative of £3.5bn.
The deal will bring about the latest high-profile exit from the London Stock Exchange, with 11 firms worth over £1bn having now quit the market via takeovers this year.
Daniel Letter, chief executive of Prologis, said: “This deal brings together Segro’s exceptional portfolio and customer relationships with Prologis’ global platform, operating expertise and financial strength.
“We look forward to building on the strengths of both companies and creating even greater value for our customers and shareholders.”
Deal ‘will create compelling platform’
David Sleath, Segro’s chief executive, said: “Prologis shares our conviction in the long-term structural drivers underpinning demand for modern logistics and data centre infrastructure.
“We believe the combination would bring together two highly complementary businesses and create a compelling platform.”
The two real estate firms had exchanged barbs for weeks ahead of Prologis’ final offer, as the companies battled over the value of their respective data centre estates.
Segro’s valuation was “unrealistic,” Prologis had said, because the FTSE 100 firm has understated the risks of its “speculative, long-dated, often un-zoned and untenanted development projects”.
Approach ‘opportunistic and inadequate’
Last month, Sleath slammed what he dubbed an “opportunistic, one-sided and inadequate” Prologis offer of £12.6bn.
Following crunch talks on the Sunday before Prologis tabled its final offer, Segro criticised the US firm’s top team for not putting forward a further offer during the talks.
Prologis hit back, claiming that this meeting was meant “not to present a further revised offer, but rather to understand whether there was a credible path to a transaction”.
The US real estate firm said on Tuesday that Segro shareholders will be able to claim the British business’s interim dividend of 10.14p per share, plus the final dividend which will be declared in March.
Prologis said the final agreed offer represents a 39 per cent premium to Segro’s share price on the day it made its first takeover approach.
Segro’s share price jumped one per cent to 969p in early trading.