24 June 2024
If you are covering Segro's latest results, please see the following comment from Oli Creasey, head of property research at Quilter Cheviot:
Segro, the industrial and logistics landlord and UK's largest REIT, has today announced that it received a takeover bid from Prologis, a US REIT with a global footprint and $140bn market cap. The bid was an all-share offer, valuing Segro at 925p per share, equal to the company's most recently reported NAV. Segro's board has rejected the proposal.
The news is a boost for Segro shareholders, with the bid 25% ahead of last night's close price. However, the ripples of the offer, whether it is eventually successful or not, will be felt throughout the UK REIT sector. 2025 was a year of significant M&A across UK REITs, and it felt as though the pace of takeovers and mergers has been slowing in 2026, despite a handful of deals announced year-to-date. Up until this point, the M&A focus has been at the lower end of the size range, with a host of smaller REITs hoovered up and aggregated into larger portfolios. Only PHP's acquisition of Assura, which created a company with c. £2.4bn market cap, took place in the top half of the index names, with some doubt over whether larger companies were genuine M&A targets owing to their size and complexity.
Today's offer for Segro blows that notion out of the water. Segro may be the biggest fish in the UK REIT pond, but at a market cap below £10bn is a minnow compared to Prologis. It remains to be seen whether the combination will go ahead - in our view Prologis would be reluctant to increase the offer materially and take it above NAV - but the very fact that it was deemed possible given the company's pan-European footprint and 460 employees that make it a more complex transaction than its smaller peers means that the entire sector could be back in the shop window for even larger, foreign companies.
