Segro Shares Fall After Rejecting £13.5 Billion Prologis Takeover Bid

Shares in British warehouse owner Segro PLC (SGRO) fell on Monday after the company's board rejected a third takeover proposal from U.S. industrial logistics giant Prologis, Inc. (PLD). The rebuff has increased investor uncertainty over the deal's prospects, leading to a pullback in the stock after a recent rally.

Takeover Bid Rejected

Segro's board unanimously turned down the latest offer from Prologis, valued at approximately £13.5 billion, according to a disclosure from Prologis. This marks the third unsuccessful approach by the U.S. firm since it first expressed interest in late June.

The rejected proposal was equivalent to roughly 993 pence per Segro share. The terms consisted of 0.0890 new Prologis shares for each Segro share, along with a partial cash alternative of up to £2.7 billion. Analysts at Jefferies noted the offer represented a 33.8% premium to Segro's undisturbed share price before the initial approach.

Market Impact

Following the announcement, Segro's stock slid nearly 2.0% to 879.87p in London trading, retreating from an intraday 52-week high of 900p. The decline reflects profit-taking by investors who had bid up the shares in anticipation of a successful acquisition. Increased deal risk is now being priced into the market.

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The negative sentiment extended to the broader logistics property sector. Other real estate investment trusts (REITs) in the space, which had rallied on the initial news of M&A activity, also came under pressure. The FTSE 100's weaker performance on the day provided little support amid a cautious global risk tone.

Regulatory Deadline Looms

Attention now turns to a key regulatory deadline. Under UK rules, Prologis must announce a firm intention to make an offer or walk away by 5:00 pm London time on July 22. This "put up or shut up" deadline, set by the UK Takeover Panel, creates a binary outcome for investors, though an extension can be requested.

The combination of Segro's firm rejection, the ticking clock on the regulatory deadline, and a softer broader market has prompted investors to reassess the likelihood of the takeover's success.