UK's Segro agrees $19 billion Prologis takeover after investor pressure

Aug 4 (Reuters) - British warehouse landlord Segro has accepted a takeover offer by rival U.S. logistics firm Prologis in a deal worth up to £14.3 billion ($19.19 billion), the companies said on Tuesday, following pressure from investors.

The deal adds to a record year for mergers and acquisitions in the UK, and is the second-biggest so far after Unilever's $65 billion food business merger, announced in March. It also ranks among the biggest foreign takeovers of a UK-listed company on record, LSEG data showed.

Segro's shares closed up 1.4% at £9.75, but were still below the agreed takeover price of up to £10.54 per share. Prologis shares were down 2.31% during U.S. trading hours.

INVESTORS GET THEIR WAY

Segro, which owns around 10.9 million square metres (117 million sq. ft) of space across Europe, had rejected three previous approaches from Prologis but said last month that it was minded to back a "best and final proposal".

Investors including APG Asset Management, Norges Bank and CCLA Investment Management had urged the companies to engage in talks, saying a combination would be valuable.

CCLA, Norges Bank and APG declined to comment on Tuesday.

"Prologis and Segro believe that the combination offers a compelling opportunity to Segro shareholders," the companies said in a statement. As of Monday, Prologis and Segro had a combined market capitalisation of over $152 billion.

Prologis counts Amazon, FedEx and UPS among its customers, and Prologis and Segro have been building out a data centre pipeline to tap into the booming AI industry.

AGREED TERMS

The agreed offer comprises 0.0920 Prologis shares, a partial cash alternative of up to £3.5 billion, and a potential final dividend, alongside a possible secondary London listing of the combined group, of which Segro shareholders will hold roughly 8.9%.

The offer is at a 42% premium to Segro's closing price on June 23, a day before Prologis went public with its interest. The companies had until August 12 to finalise a deal under UK takeover rules.

Evercore, Morgan Stanley, Goldman Sachs and UBS advised Segro, while Rothschild, J.P. Morgan, Eastdil Secured, Citigroup, and BofA Securities advised Prologis.

($1 = 0.7450 pounds)

(Reporting by Prerna Bedi, Pushkala Aripaka, Anushka Chourasia, Nithyashree R B and Shashwat Awasthi in Bengaluru; Editing by Subhranshu Sahu and Susan Fenton)