Prologis pushes SEGRO on merger with 5.8GW data center pitch

Prologis (PLD) turned up the pressure on SEGRO's board Thursday, releasing a fresh investor presentation that argues shareholders should evaluate a combination. The San Francisco-based industrial REIT cited a stronger combined platform and a data center power pipeline it pegs at 5.8 gigawatts or more.

The presentation, filed with the UK Takeover Panel, argues that a merger would create the dominant industrial logistics operator in Europe. Prologis said the 5.8GW pipeline positions the combined entity to capture demand from cloud providers and AI infrastructure buildout, a segment where scale and land access are becoming decisive.

Prologis first approached SEGRO in late 2024 with an all-stock offer. The UK REIT's board has not engaged publicly. The new presentation is an attempt to bring the case directly to shareholders and push the board to open talks. Prologis said SEGRO's independent valuation understates the strategic value of the combination, particularly in light of rising power constraints and the shift toward urban logistics.

The offer values SEGRO at roughly £11 billion, a premium to its recent trading range. Prologis argues that the combined company would generate cost synergies and revenue benefits from cross-selling across a single portfolio that spans 1.5 billion square feet globally.

SEGRO shares traded higher in London on Thursday after the release. The stock has gained about 12% since the initial proposal became public, signaling investor optimism that a deal may go through. Prologis shares were flat in New York premarket.

What the new presentation adds is specificity. The 5.8GW figure is broken out by region, with the largest share in the U.S. Sun Belt and Western Europe. Prologis said it has secured land and power interconnection agreements for a majority of that pipeline, reducing execution risk. Data center tenants like AWS, Microsoft and Google are signing 15-year leases with escalators tied to inflation, giving the landlord a revenue stream that traditional logistics leases do not offer.

The combination would also give Prologis a stronger foothold in the UK and continental Europe, where SEGRO owns dense urban land parcels near London, Paris and Berlin. Those sites are difficult to replicate due to planning restrictions and competition for land.

Prologis carries an Alpha Score of 51 out of 100, reflecting mixed sentiment among the models that track the stock. The REIT sector overall has lagged the S&P 500 this year as interest rates stay elevated. Data center exposure has become a differentiating factor. Investors are paying a premium for landlords that can offer power and connectivity along with concrete and steel.

SEGRO has a competing narrative: it argues that its own data center pipeline, about 1.5GW under development, can grow organically without ceding control. The board has not formally rejected the offer. It has not scheduled a meeting with Prologis either. Thursday's presentation is designed to create urgency among SEGRO's institutional holders, many of whom are long-term real estate investors.

The UK Takeover Panel requires Prologis to either formalise a firm offer or walk away by May 15. The presentation is a signal that Prologis intends to push toward a binding bid, not let the deadline lapse.