Prologis, the world's largest logistics real estate investment trust, has had a £12.6 billion initial takeover approach to the UK's largest REIT Segro thrown out.
In a stock market announcement, the global industrial giant said that on 16 June 2026 it had sent a letter to the board of industrial REIT Segro setting out the terms of an indicative all-share proposal that would see it buy the entire issued and to be issued share capital of Segro.
On 23 June, the board of Segro "unequivocally rejected" the combination proposal. By 8:12 am Segro shares had soared by 16.77% on this morning's announcement to trade at 866.40p per share giving it a market capitalisation of £11.76 billion.
In a statement at 9:34 am, Segro said the proposal "falls a long way short of [Segro's] own views on value".
It added that it was "opportunistically timed and sought to take advantage of the clear dislocation between Segro's current share price and its highly attractive underlying business and strong prospects". It said has been accentuated by "major geopolitical issues which have adversely impacted trading valuations across the UK and European real estate sectors relative to the US REIT sector".
The bid is the latest example of the trend towards mergers, acquisitions and take-privates in the listed real estate sector as companies eye increased scale and the prevailing discount of real estate company share prices to net asset values.
The tie-up would see Segro shareholders receive 0.084 new Prologis shares for each Segro share. Based on the Prologis share price of $145.3 that implies a value of 925 pence for each Segro share and values the business at approximately £12.6 billion.
Prologis said it represents a premium of 24.6% to Segro’s share price of 742 pence on 23 June 2026. It is also a price equal to Segro’s last reported European Public Real Estate Association net tangible asset per share of 925 pence as of 31 December 2025.
Segro shareholders would hold around 10.5% of Prologis’s issued share capital.
Prologis said it is a "highly compelling opportunity to receive shares in the world’s largest logistics REIT with a $140.9 billion market capitalisation".
In its filing it said the takeover would provide Segro shareholders with participation in a global platform with a "track record of outperformance across key metrics and the successful integration of major corporate transactions with the delivery of synergies". Prologis believes these factors will provide "accelerated growth compared to the growth available to them in a standalone Segro".
Prologis believes that its "global platform, balance sheet strength and diversified capital base can unlock the significant embedded value of Segro’s development and data center pipeline". Prologis also believes the combination would deliver significant benefits to its customers, employees and Prologis shareholders.
It argues Segro shareholders would immediately see their investment diversified into global growth markets. Segro and Prologis’ European portfolios are "highly complementary with an expected clear line of sight to scale benefits", it adds.
Prologis said a combination also resolves "structural constraints limiting Segro's growth potential with the REIT having traded at a persistent discount to its EPRA NTA per share with an average discount to EPRA NTA of 19% and 17% over the last two years and three years, respectively".
Prologis also said it has "superior balance sheet strength and its access to public equity, debt and private capital will enable Prologis to unlock embedded opportunities for investment for which Prologis believes Segro is unable to unlock standalone due to structural constraints, including its balance sheet capacity and trading discount".
It also accelerates monetisation of Segro’s development, power and data centre opportunities, it said.
Prologis is urging Segro shareholders to "encourage the Segro Board to engage with Prologis to allow a binding offer to be put to Segro shareholders for their consideration".
Analysts at Panmure Liberum said: "While the offer has been framed as attractive because it equates to Segro's last reported EPRA NTA, we struggle with the notion that shareholders should be expected to sell a business at book value simply because the public market has failed to recognise its potential. However, we think the bid underlines much of the value in the sector which is being under-priced by the stock market."
The analysts add: "Acquiring Segro would remove one of the UK's highest-quality listed real estate growth platforms from the public market. Shareholders are giving up future participation in a business that has spent decades assembling irreplaceable assets around key logistics, transport and power infrastructure hubs. Taking that growth opportunity away from public market investors should, in our view, require a valuation that reflects not only today's assets, but also the future value creation potential embedded within the platform. A price equivalent to book value struggles to achieve that."
Peel Hunt's analysts described it as an "unattractive offer" in a note. The write: "Prologis cites the 'persistent discount' at which Segro shares have traded over the past two years, while Segro states that the current share price dislocation. While we acknowledge the share price premium, we believe the latent
value in Segro’s pipeline alone should warrant a premium rating and, as such, we do not see an offer on these terms as attractive."
In its full year results for 2025, published in February, Segro said it had secured £99 million of new headline rent in the year, the highest in its history. Its portfolio value increased to £19 billion, reflecting an increase of 1%, after it said warehouse property values stabilised last year. UK properties experienced a 1.6% value increase, slightly lower then the 1.8% growth recorded in 2024.
It referenced low volumes of investment transactions due to geopolitical uncertainty, with the UK being particularly "hampered by concerns over the impact of the economic outlook on occupiers, as well as interest rate expectations".
Segro famously begun life as the owner of the Slough Trading Estate, which was opened in 1920 and was one of the first business parks in the UK. For much of its life it was known as Slough Estates.
The park covers 486 acres and comprises 7,500,000 square feet of principally industrial across more than 600 buildings. The estate has also become embedded in UK popular culture as both the home of David Brent's Wernham Hogg Paper Merchants in comedy series The Office and the inspiration behind poet John Betjeman's "Slough", his famous poem criticising the over-development of rural England.
A critical moment in its journey towards being the UK's largest REIT and one of the largest industrial developers across the UK and Europe was Slough Estates' 2009 acquisition of UK rival and peer Brixton Estates in a £107 million rescue deal. The group had rebranded as Segro in 2007.
In recent years the REIT has benefitted from the relentless increase in global investor appetite for logistics, industrial and data centres as ecommerce in particular has driven a massive increase in occupier demand.
The history of Prologis, the world’s biggest industrial developer, dates back to 1983 with the formation of AMB Property Corporation in America focusing on investment in office, industrial and community shopping centres on behalf of major institutional investors.
In 1991 separately Security Capital Industrial Trust was incorporated and by 1994 the company was listed on the New York Stock Exchange. It opened its first European office in Amsterdam in 1997 and changed its name to Prologis in 1998.
In 2011 Prologis and AMB merged to create a global industrial real estate giant with more than $40 billion of assets under management and a platform of logistics and distribution facilities on four continents. Among a number of subsequent takeovers, in 2020 Prologis completed an all-stock acquisition of Liberty Property Trust for $13 billion.
By April this year, the San Francisco-based firm announced it had signed 64 million square feet of warehouse leases, its highest for a first quarter, as revenue rose 7.5% to $2.3 billion from the year-earlier period. In the UK it has a 35.3-million-square-foot portfolio and 74 staff.
Prologis's move is the latest example of consolidation in real estate as a continued drag on share prices alongside a lack of distress at the asset level has encouraged listed and non-listed buyers to take advantage.
Recent take-privates in the UK have included Starwood Capital's £673.5 million acquisition of the Balanced Commercial Property Trust, the Goldentree-backed acquisition of Abrdn Property Income Trust, and Apollo's refinancing of £610 million of public bonds secured against Canary Wharf's shopping centre. On the listed side, many big names have become part of bigger organisations, notably LondonMetric's takeover of LXi REIT, NewRiver's merger with Capital & Regional and Tritax Big Box REIT's mega tie up with UKCM.