Prologis makes final eleventh-hour $18.8 billion takeover bid for UK's Segro

By Prerna Bedi and Pushkala Aripaka

July 22 (Reuters) - U.S. warehousing giant Prologis on Wednesday made what it called its best and final proposal to buy British rival Segro for about £14 billion ($18.8 billion), in a last-minute approach ahead of a deadline as investors urged the pair to keep talking.

Shares in Segro rose more than 4% to £9.07 by 0936 GMT but remained below the new bid price of £10.32 per share.

The proposal comprises 0.0920 Prologis shares and a partial cash alternative of up to £3.5 billion, while retaining the possibility of a secondary London listing, marking an improvement from the third bid Segro rejected on Monday.

"The Best and Final Proposal is final and will not be increased," Prologis said in a statement, although it added that it could do so in some exceptional cases.

Its bid is at a 45% premium to Segro's closing price the day before Prologis' interest became public on June 24.

SEGRO CITES UNDERVALUATION

Segro has previously insisted the bids undervalued it while turning down approaches from Prologis going back to March 2024.

If a deal is agreed, it could be one of the biggest foreign takeovers of a UK-listed company, LSEG data showed, and add to record levels of dealmaking in the country.

"We met and engaged with Prologis over the weekend and have been clear that we would consider and engage again on a revised proposal," Segro said in a statement emailed to Reuters shortly before Prologis' improved bid was announced.

Segro, which owns around 10.9 million square metres of space across Europe, and Prologis, which counts Amazon, FedEx and UPS as customers, have been building out a data centre pipeline to tap into the booming AI industry.

Prologis said it has requested authorities for an extension to the deadline to formalise a takeover, which was for 1600 GMT on Wednesday.

SHAREHOLDER PRESSURE

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

APG and Norges are top three shareholders in Segro, and they are also investors in Prologis. CCLA meanwhile is a smaller investor in Segro.

An offer above £10 "may still fall short of Segro's board's expectations but could encourage more shareholders to publicly express their views," Kepler Cheuvreux analyst Frederic Renard had said earlier.

Segro and the investors did not immediately respond to a request for comment on the latest proposal.

($1 = 0.7478 pounds)

(Reporting by Prerna Bedi, Pushkala Aripaka and Anushka Chourasia in Bengaluru; additonal reporting by Nithyashree R B and Simone Lobo; Editing by Subhranshu Sahu, Kirsten Donovan and Louise Heavens)