European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>The agreed Scheme values SEGRO at 1,054.3p including the retained 2026 final dividend, effectively matching our 1,055p target price and validating our original standalone valuation.</li>
<li>Using current market prices, the live completion value is 1,030.9p, leaving a 7.3% gross spread and an estimated 8.1% annualised return to our assumed 30 June 2027 settlement.</li>
<li>We raise our completion probability to 88%, above the market-implied 75.8%, and now favour a conventional long SEGRO/short Prologis merger-arbitrage position over an outright long SEGRO exposure.</li>
</ul>


The agreed Scheme values SEGRO at 1,054.3p including the retained 2026 final dividend, effectively matching our 1,055p target price and validating our original standalone valuation.
Using current market prices, the live completion value is 1,030.9p, leaving a 7.3% gross spread and an estimated 8.1% annualised return to our assumed 30 June 2027 settlement.
We raise our completion probability to 88%, above the market-implied 75.8%, and now favour a conventional long SEGRO/short Prologis merger-arbitrage position over an outright long SEGRO exposure.


Prologis/SEGRO: Agreement Reached at Fair Value

<ul>
<li>Prologis increased its Best and Final proposal to 0.0920x shares and expanded the Partial Cash Alternative, bringing consideration within 2% of our 1,055p target price.</li>
<li>We raise our probability of a successful transaction to 75%, as negotiations appear to have shifted from valuation towards agreeing the remaining terms of a recommended offer.</li>
<li>Despite a weaker Prologis share price reducing implied consideration to around 1,019p, the proposal remains close to our valuation, limiting the case for further Board resistance.</li>
</ul>


Prologis increased its Best and Final proposal to 0.0920x shares and expanded the Partial Cash Alternative, bringing consideration within 2% of our 1,055p target price.
We raise our probability of a successful transaction to 75%, as negotiations appear to have shifted from valuation towards agreeing the remaining terms of a recommended offer.
Despite a weaker Prologis share price reducing implied consideration to around 1,019p, the proposal remains close to our valuation, limiting the case for further Board resistance.


SEGRO: Prologis Moves Closer to a Recommended Offer

<ul>
<li>Prologis' third proposal narrows the valuation gap to 62p/share and increases deal credibility, but negotiations remain focused on price ahead of the Rule 2.6 deadline.</li>
<li>SEGRO's willingness to engage on improved terms raises the probability of a recommended transaction, although today's proposal still appears insufficient to secure Board support.</li>
<li>After a strong share price reaction, the opportunity has shifted from deep value to merger arbitrage, favouring outright SEGRO exposure over a fully hedged position.</li>
</ul>


Prologis' third proposal narrows the valuation gap to 62p/share and increases deal credibility, but negotiations remain focused on price ahead of the Rule 2.6 deadline.
SEGRO's willingness to engage on improved terms raises the probability of a recommended transaction, although today's proposal still appears insufficient to secure Board support.
After a strong share price reaction, the opportunity has shifted from deep value to merger arbitrage, favouring outright SEGRO exposure over a fully hedged position.


Prologis/SEGRO: The Gap Narrows, but the Negotiation Continues

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

The Russell 2000 (IWM) has been moving sideways for 7 months between $208 and $234.50, emblematic of the mixed market environment that we still find ourselves in. As long as $208 support holds we remain constructive on the overall market. On the plus side, conditions have been improving over the past two weeks -- not getting worse (more on this below). This increases the odds of a breakout above $234.50 on the IWM in the coming weeks or months, which would signal the start of a new broad-based bull market.Charts Highlighted: EEM, JD, NFLX, TSLA, YZCAY, BTU, HCC, ARCH, ARLP, CG, ARES, AB, CNS, VRTS, BSIG, VCTR, FDUS, PLD, REXR, FR, STAG, IIPR, TRNO, PSA, EXR, CUBE, LSI, and NSA

The Russell 2000 (IWM) has been moving sideways for 7 months between $208 and $234.50, emblematic of the mixed market environment that we still find ourselves in. As long as $208 support holds we remain constructive on the overall market. On the plus side, conditions have been improving over the past two weeks -- not getting worse (more on this below). This increases the odds of a breakout above $234.50 on the IWM in the coming weeks or months, which would signal the start of a new broad-based bull market.Charts Highlighted: EEM, JD, NFLX, TSLA, YZCAY, BTU, HCC, ARCH, ARLP, CG, ARES, AB, CNS, VRTS, BSIG, VCTR, FDUS, PLD, REXR, FR, STAG, IIPR, TRNO, PSA, EXR, CUBE, LSI, and NSA

Conditions Continue To Improve; EM Buy Signal; Growth Outperforming; Gold Vs. SPX Downtrend Intact

<ul>
<li>Prologis' original 925p proposal now implies only 858p/share after the fall in its own share price, leaving SEGRO trading above the current exchange ratio and signalling expectations of higher terms.</li>
<li>We estimate SEGRO's intrinsic value at 1,055p/share by adding conservative values for the development pipeline and data-centre option to reported EPRA NTA, leaving a 197p valuation gap versus today's proposal.</li>
<li>Prologis' strongest argument is cost of capital. SEGRO can fund its pipeline, but likely over six to seven years. Prologis could accelerate development materially through its larger balance sheet platform.</li>
</ul>


Prologis' original 925p proposal now implies only 858p/share after the fall in its own share price, leaving SEGRO trading above the current exchange ratio and signalling expectations of higher terms.
We estimate SEGRO's intrinsic value at 1,055p/share by adding conservative values for the development pipeline and data-centre option to reported EPRA NTA, leaving a 197p valuation gap versus today's proposal.
Prologis' strongest argument is cost of capital. SEGRO can fund its pipeline, but likely over six to seven years. Prologis could accelerate development materially through its larger balance sheet platform.


United States

Prologis, Inc. is an owner, operator and developer of industrial real estate, focused on global and regional markets across the Americas, Europe and Asia. The Company also leases modern distribution facilities to customers, including manufacturers, retailers, transportation companies, third-party logistics providers and other enterprises.

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Prologis Inc (PLD US)

Prologis/SEGRO: Agreement Reached at Fair Value

The agreed terms close one opportunity and create another. We update our valuation, probabilities and investment view accordingly.

Jesus Rodriguez Aguilar

SEGRO: Prologis Moves Closer to a Recommended Offer

Prologis' revised Best and Final proposal brings consideration close to our target price and increases the likelihood of a recommended offer. We...

Jesus Rodriguez Aguilar

Prologis/SEGRO: The Gap Narrows, but the Negotiation Continues

Prologis' third proposal increases deal credibility and narrows the valuation gap, but investors are now paying for an advanced negotiation rather...

Jesus Rodriguez Aguilar

Conditions Continue To Improve; EM Buy Signal; Growth Outperforming; Gold Vs. SPX Downtrend Intact

Emerging markets (EEM) appear to be bottoming; one attractive buy candidate is JD.com (JD). We also highlight buy opportunities within Energy...

Vermilion Research

SEGRO: What Is Prologis Really Buying?

A week after the approach became public, the numbers look different. Updating the valuation with current market prices raises questions that...

Jesus Rodriguez Aguilar

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