Prologis' stake in the Euronext-listed closed-ended investment fund Prologis European Properties (PEPR) has changed only marginally since the company launched a mandatory cash tender offer of EUR 6.10 per unit on April 22.
Prologis' stake in the Euronext-listed closed-ended investment fund Prologis European Properties (PEPR) has changed only marginally since the company launched a mandatory cash tender offer of EUR 6.10 per unit on April 22.
In a statement on Friday to inform on the offer's progress, PEPR's parent company and largest shareholder Prologis said it has tendered or purchased in the open market 8,818 ordinary units in PEPR, bringing its stake to 39%, from 38.9% held previously.
PEPR's management company, Prologis Management, is expected to provide a 'reasoned opinion' in relation to the offer in the next few days, which may prompt further sales. Prologis' offer expires on May 6.
On Thursday Fir Tree Partners, a New York-based private investment firm that owns 4.3% of Prologis European Properties (PEPR), said it opposes a EUR 1.2 bn tender offer by the Denver-based warehouse giant which was deemed as 'significantly' lower than PEPR's fair value.
In a letter to Prologis, Fir Tree Partners said it believes the bid is not in the best interests of PEPR because it significantly undervalues PEPR units. The minority shareholder noted that PEPR's net asset value is EUR 6.32 under EPRA standards but its 'true value' is even higher because commercial rents are rising as the global economy improves. 'In an M&A context, buyers typically pay a premium to underlying asset value to reflect the value of control and of synergies that they may achieve,' Fir Tree said.
Prologis' bid was made in response to an earlier offer of EUR 6 made by Algemene Pensioen Groep (APG) of the Netherlands and the Goodman Group of Australia.
PEPR's portfolio comprises 232 distribution facilities, covering 4.9 million m2 across 11 European countries with an estimated net market value of EUR 2.8 bn.
Prologis is currently finalising a merger with AMB Property Corporation which will create the world's biggest industrial REIT. Shareholders in the Denver-based group are expected to vote on the merger on June 1.
