Prologis 'clearly' can make a higher offer to secure Segro deal, analysts say

Segro PLC's (LSE:SGRO) rejection of a £12.6 cardinal takeover attack from US elephantine Prologis Inc (NYSE:PLD) may beryllium lone the opening circular successful what could go 1 of the biggest UK spot deals successful years.

The US logistics giant's all-share connection valued Segro astatine 925p a share, a 24.6% premium to the undisturbed stock terms and broadly successful enactment with the company's past reported nett plus value.

That was not capable for Segro's board, which dismissed the attack arsenic "opportunistically timed" to instrumentality vantage of the "clear dislocation betwixt Segro's existent stock terms and its highly charismatic underlying concern and beardown prospects" and "falls a agelong mode short" of its appraisal of the company's value.

The cardinal question present is whether Prologis comes backmost with more.

Analyst John Cahill astatine Stifel believes it can. With a marketplace worth of astir $139 cardinal and important fiscal resources, "an improved connection is intelligibly possible" from Prologis.

And the enactment of taking its connection public, said AJ Bell's Dan Coatsworth, "suggests the archetypal all-share bid submitted past week is conscionable its opening salvo and that Segro's rejection won't beryllium the last connection successful the story".

Segro's shares commercialized astatine astir a 20% discount to nett assets, reflecting a wider malaise crossed the UK REIT assemblage that has near adjacent its strongest companies looking susceptible to deep-pocketed overseas bidders.

Other analysts argued that a bid based connected existent NAV understates Segro's attractions.

Bjorn Zietsman astatine Panmure Liberum said the important information is whether an connection adequately compensates shareholders for the aboriginal returns disposable from Segro's improvement pipeline, municipality logistics portfolio, powerfulness infrastructure and emerging information centre operations.

Notably, Prologis' ain rationale "appears to enactment this view", Zietsman said, noting that the US institution repeatedly highlighted the embedded worth wrong these opportunities and its content that its standard and fiscal spot tin accelerate their monetisation.

Peel Hunt expert Matthew Saperia agreed that aboriginal returns were a cardinal consideration, arguing that the latent worth successful Segro's pipeline alone warrants a premium valuation. As such, helium said, "we bash not presumption an connection connected these presumption arsenic attractive".

On the different broadside of the coin, Cahill said the Segro committee and absorption squad "would request to see the champion interests of shareholders fixed the UK REIT assemblage has traded astatine a important discount to NTA for immoderate years," adjacent for companies with payment from afloat liquid equity, a portfolio successful a structurally supported sector, a beardown equilibrium expanse and a absorption squad with a proven way grounds for excellence".