Prologis pursuit of Segro descends into silver-haired scrap

Prologis’s attempt to take over Segro has descended into a spat over the age of its chief executives as the US firm looks to convince the FTSE 100 company’s shareholders to accept its offer, City AM can reveal.

New York-listed Prologis, the world’s largest listed real estate company, has warned Segro’s investors that 65-year-old boss David Sleath is nearing retirement and it would be better off as a division of the larger US property trust, sources told City AM.

Segro has privately hit back at the claims and argued that Prologis’s own former chief executive was four years older than Sleath when he stepped down, the people said.

Prologis, which manages some $98bn in assets, kicked off its pursuit of Segro last month and the two property firms have traded strong words over its takeover attempts. 

The companies’ management teams met on Sunday but the talks failed to yield an agreement.

Prologis, which saw its latest £13.5bn bid slapped down over the weekend, has repeatedly reminded Segro’s investors that “questions remain regarding leadership succession”. 

Segro boss: I’m in fine fettle

Sleath has led the firm for 15 years – far longer than the six-year average tenure of a FTSE 100 boss. 

While he has attempted to quash rumours he may soon retire, a person close to the discussions claimed his age is causing concern among those close to the business. 

But a person close to Segro described attempts to cast Sleath’s future into doubt as a “cheap shot”. 

Prologis’s former chief executive Hamid Modghadam retired at the age of 69, four years older than Sleath, and remains involved in the company as executive chairman, they pointed out.

Sleath himself has rejected suggestions that he is preparing to retire. “I do a lot to stay in good shape and keep myself young,” he told The Times earlier this month. 

Asked when he might step back, Sleath suggested that he will retire when his age as calculated by Whoop, a health and fitness tracker, reaches 65. Sleath’s current Whoop age is 51.

Andy Harrison, Segro’s chairman, said: “The board is very supportive of David, who is one of the strongest and best CEOs in the sector and has an impressive track record. 

“We are glad to have him at the helm. The Board does and should think about succession, but this is not a topic for today given David’s commitment to the business.”

Norges urges talks

After the meeting on Sunday, Segro criticised Prologis’ management for not putting forward a further offer during the talks.

Prologis hit back on Tuesday morning, claiming that this meeting was meant “not to present a further revised offer, but rather to understand whether there was a credible path to a transaction”. 

On Tuesday afternoon, Norges Bank – which owns 8.3 per cent of Segro and 1.3 per cent of Prologis – urged the two real estate firms to enter talks. 

“We ​believe the proposal merits consideration, ‌and we encourage the boards of both Segro and ‌Prologis to enter into constructive discussions,” the $2.3 trillion fund said.

Prologis operates two joint ventures with Norges. Prologis European Logistics Partners was worth €2.4bn when it was set up in 2013, and Prologis US Logistics Venture was founded in the same year with an initial $1bn footprint.

Shares in Segro fell three per cent to 874p on Tuesday.