Prologis vows to retain PEPR stake

Prologis, the Denver-based global distribution facilities specialist, has confirmed that it intends to retain its ownership stake in, and management agreement with, Eurnonext-listed Prologis European Properties (PEPR).

PEPR is listed in Amsterdam with a market capitalisation of EUR 1 bn. The fund holds a portfolio of 232 European logistics assets.

The statement by US-based Prologis came in response to the announcement by Dutch pension fund APG and Sydney-listed Goodman Group on Tuesday that they are considering making a cash offer together with a group of 'like-minded investors', collectively referred to as the Investor Group, to acquire PEPR.

This would involve buying Prologis' 33% interest in PEPR. In addition, PEPR's management rights would be transferred from Prologis to Goodman. In a statement, APG and Goodman said the proposed offer of EUR 6 per ordinary unit would provide 'a compelling value proposition' for all unitholders that would close the 'persistent gap between PEPR's trading price and its underlying NAV'.

Prologis had already rejected the indicative offer, while Prologis European Properties issued a statement saying that it has not been contacted by the Investor Group or 'any other pension or sovereign wealth fund in relation to any offer to acquire ordinary units in PEPR'.

In its follow-up statement, Prologis in Denver emphasised it was not prepared to relinquish its stake in PEPR. Walter Rakowich, CEO of Prologis, said: 'Prologis has no intent or desire to sell its interest in PEPR. Additionally we have no intention of selling or relinquishing the management of PEPR. The value proposition of PEPR has always been inextricably linked to Prologis' active ownership and management. Prologis provides unparalleled industrial management expertise, as well as a strong European operation and a global finance organisation.'

Prologis, which is merging with industry peer AMB Corporation, offered to continue its dialogue with APG regarding what it called 'a range of value-enhancing alternatives in a professional and cooperative fashion'.

'APG had acknowledged in related discussions that it intended to use the timing of our pending merger to exert undo influence, and we regret that APG and Goodman have elected to pursue this matter in the media,' Rakowich added.

Prologis said it did not expect that the indicative offer for PEPR would have any impact on the proposed merger with AMB.

Click on the link below to read 'APG hardens stance in batle over PEPR'