Prologis said Monday that its enhanced bid to acquire London-based logistics warehouse operator Segro had been rejected. Prologis' third offer, valued at £13.5 billion ($18.2 billion), represented a 6% increase above its initial proposal and included a 20% cash component.
The latest offer, a 41% premium to Segro's (LSE.SGRO) three-month weighted average share price, would give Segro shareholders .089 new Prologis shares for each share held, with the option to receive up to 20% in cash.
San Francisco-based Prologis (NYSE: PLD) ******* erts that a business combination would give Segro access to a larger logistics real estate network and a lower cost of capital. It previously said Segro trades at a discount because it is required to make dilutive equity issuances to fund its projects. The prior two iterations were all-stock offers.
"Prologis' proposal provides upfront value, greater flexibility and long-term upside opportunity," the Monday news release stated. "SEGRO's standalone plan relies on flawless execution of a significant, long-dated development pipeline, substantial third-party funding and an unjustified valuation."
Prologis has until 5:00 pm London time on Wednesday to finalize firm intentions, per British takeover rules.