Prologis secures £14bn Segro deal, eroding London market
Segro’s capitulation to a £14bn offer from Prologis deprives the London market of its largest commercial landlord and a rare pure-play European datacentre exposure.
Segro has abandoned its defence against a hostile approach from US giant Prologis, confirming it is "minded to recommend" a final offer valuing the FTSE 100 warehouse landlord at £14 billion, or £10.32 per share. The two companies have until 12 August to finalise a firm agreement. Structured primarily as a share swap with only a 25% cash component, the deal is the largest FTSE 100 takeover so far this year.
The 14% premium to Segro's 905p book value proved decisive for institutional investors, despite CEO David Sleath’s argument that the standalone business was significantly undervalued. Sleath pointed to a CBRE estimate valuing Segro at near-£18 billion, or £13 a share, driven by expansion in AI datacentres and logistics. However, investors led by Norway’s sovereign wealth fund, which holds an 8% stake, prioritized the certainty of the immediate offer.
The outcome underscores a structural vulnerability for UK listed companies facing US acquirers. Many of the large shareholders pushing for a deal held positions in both Segro and Prologis. For these dual-holders, the takeover debate was reduced to a portfolio management exercise rather than a fight for a fair premium, inevitably tilting the scales in favour of the $135 billion San Francisco-based acquirer.
The acquisition removes a unique asset from the European investment landscape. Panmure Liberum analyst Bjorn Zietsman noted that Segro was "one of a small number of listed, pure play vehicles offering direct exposure to UK and European datacentre and logistics development." "Investors lose the ability to choose UK/European datacentre and logistics growth specifically," Zietsman wrote, adding that they will instead inherit whatever regional weighting Prologis’s management assigns within its £200 billion global platform.
Prologis has promised a secondary London listing, but historical precedent suggests trading liquidity will quickly gravitate to the US primary market. The departure of Segro leaves the London exchange heavily reliant on traditional real estate investment trusts focused on domestic office blocks and retail centres, marking another step in the hollowing-out of the UK equity market.
