PEPR 'rejects' ProLogis bid

The management company of ProLogis European Properties says a €6.10 offer per ordinary share from ProLogis is ‘inadequate’ given the company’s full value potential.

ProLogis European Properties (PEPR) today branded a takeover offer from its external manager, global logistics giant ProLogis, as financially “inadequate”.

Issuing a response to the €6.10 share offer by Denver-based ProLogis, the pan Europe logistics specialist said it had consulted with independent members of the board, which had unanimously agreed the offer was insufficient. It has also consulted with the Commission de Surveillance du Secteur Financier – the Luxembourg authority for the financial sector – as well as taken advice from advisors, Deutsche Bank, in saying the offer should be rejected.

Peter Cassells, chief executive officer, said in a statement: “Based on our strategy, business plans and the quality of our portfolio, we believe that the offer does not reflect the full value potential of PEPR.”

Geoffrey Bell, chairman of PEPR Board, added: “The independent members of the PEPR board have carefully considered the reasoned opinion of the management company and unanimously endorse its conclusions.”     

PEPR is one of Europe’s biggest owners of distribution and logistics facilities, and was effectively put into play last month by Dutch asset manager APG, which said it wanted to make a €6 a share offer to take the company private. That indicative offer was improved upon by a mandatory offer by ProLogis pitched at €6.10 having upped its shareholding to 38 percent.

As part of its ‘reasoned opinion’, PEPR believes the progress it has made with asset management and debt refinancing in particular meant ProLogis’ offer failed to capture full value potential. The company also stressed it was following its duty to treat all unitholders equally.

Last week, Fir Tree Partners, a New York private investment firm, said ProLogis' offer undervalued the company. Fir Tree, which owns a 4.3 percent stake in PEPR, argued ProLogis’ bid had been made at a discount to the net asset value of €6.32 a share.    

Shareholders have until 6pm on Friday to decide whether to sell at the offer price.