Prologis Shares Fall After Announcing $2.1 Billion Stock Offering to Fund Segro Takeover

Shares of Prologis (NYSE:PLD) fell in premarket trading Thursday after the logistics real estate investment trust (REIT) announced a significant stock offering to help finance its potential acquisition of British warehouse landlord Segro plc (LON:SGRO).

The Offering Details

Prologis launched a public offering of 15 million shares of its common stock, aiming to raise approximately $2.1 billion in gross proceeds. The company stated the net proceeds will be used for general corporate purposes, which include funding potential acquisitions such as the recently announced Segro deal.

According to the announcement, JPMorgan and Bank of America are acting as joint book-running managers for the offering.

Market Reaction and Deal Context

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Investors reacted to the news by sending Prologis shares down 2.8% to $140.06 in premarket trading. The offering represents a dilutive capital raise, which increases the number of shares outstanding and can reduce the earnings per share for existing stockholders.

The capital raise follows the news that Segro accepted a $19 billion takeover offer from Prologis on Tuesday. If completed, the combination would mark one of the largest transactions in the real estate investment trust sector, significantly expanding Prologis's European footprint.

A Note of Caution

While the share sale is a preparatory step, Prologis cautioned that the acquisition is not yet guaranteed. The company noted there is "no assurance it will complete the Segro combination on the proposed terms or anticipated timeline, or at all."