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(Sharecast News) - Segro said on Tuesday that it was confident in its standalone investment case as it accused Prologis of trying to buy the company "on the cheap" after the US real estate firm published an investor presentation outlining the strategic and financial rationale of a deal.
Shares in the London-listed property investment and development firm surged last week after it rebuffed a 12.6bn takeover approach Prologis, arguing that it fell "a long way short" in terms of valuation.
Segro said on Tuesday that the approach was "inadequate, opportunistic and one-sided".
Under the terms of the proposed combination, Segro shareholders would receive 0.084 new Prologis shares for every Segro share they hold. Based on the closing price of 23 June, the deal implies a value of 925p for each Segro share. Following completion, Segro shareholders would hold around 10.5% of Prologis' issued share capital.
In its presentation, Prologis highlighted the "compelling value" proposition for Segro shareholders "who will participate in this growth following the combination, including a substantial upfront premium from joining the new, stronger entity and the world's leading logistics real estate platform".
Prologis also said its access to public and private capital will enable it "to unlock and accelerate the embedded value of Segro's development and data centre pipeline which Prologis believes Segro is unable to fully realise on a standalone basis given its balance sheet capacity and persistent trading discount".
Prologis pointed to its track record of outperformance, delivering "substantial" total shareholder returns driven by its development strategy, strategic capital platform, global access to capital and "resilient" operating performance, as well as "successful" integration of large-scale acquisitions.
It noted that over the past five years, total shareholder returns have equalled 38.6% for Prologis, compared with a 20.1% decline for Segro.
Responding to Prologis' presentation, Segro chairman Andy Harrison said: "There is nothing in Prologis's announcement and presentation issued this morning that changes the board's clear position. Prologis is trying to acquire Segro on the cheap when our share price has been dislocated by the Middle East conflict and at a price that reflects none of the quality, scarcity and growth embedded in the business.
"We have unanimously rejected their proposal because we continue to believe our compelling standalone investment case can deliver superior shareholder value. Capital is not a constraint on our ability to unlock all of this value for our shareholders. We look forward to providing more detail on our growth strategy and value case next week."
At 1300 BST, Segro shares were up 1.2% at 888.60p.
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