Duke Realty Rejects Nearly $24 Billion Buyout Offer From Prologis

A Prologis warehouse.


Photo:

Prologue

Duke Realty Corp.

DRE 7.83%

on Wednesday rejected an offer to buy back nearly $24 billion from warehousing giant Prologis . Inc.,

PLD -1.33%

Calling unsolicited offers is not enough.

“We believe the latest offer, which is virtually unchanged from its previous proposals, is insufficient in that respect,” Duke Realty said in a statement, adding that it would not have No further comment on the proposal at this point.

Tuesday’s preamble made its all-stock public offer to Duke Realty after more than five months of private negotiations. This agreement will add to Prologis’ vast area of ​​warehouses and distribution centers that help facilitate e-commerce orders.

Prologis controls more than 1 billion square feet of industrial real estate used by companies like Amazon.com Inc.,

Home Depot Inc.

and FedEx Corp.

to store goods and fulfill orders online.

The offer to Duke Realty, which owns about 160 million square feet of industrial real estate in 19 major US logistics markets, was seen as a vote of confidence in the e-commerce sector at the time. point some investors are worried about its growth.

Prologis offered to buy Duke Realty for $61.68 per share, or about $23.7 billion. Under the terms of that offer, Duke Realty shareholders would receive 0.466 shares of Prologis common stock for each share of Duke Realty common stock they own.

Shares of Duke Realty rose 7.8% to $53.44 on Wednesday, well below the suggested level, suggesting investors are skeptical that a deal will work.

Shares of Prologis rose 1.6 percent to $127.44.

Industrial real estate has been one of the best performing commercial real estate sectors in recent years due to the explosive growth of online commerce, which requires warehouses to store and operate. Online shopping has been given a boost during the pandemic as more and more consumers shop online.

Recent comments from several companies have blown up the growth narrative.

Shares of industrial real estate companies like Prologis and Duke Realty fell after Amazon last month posted a quarterly loss. Amazon CEO Andy Jassy shocked the industry market by saying that the company “no longer pursues physical or human capacity”.

Analysts also question whether the growth in demand for industrial spaces is sustainable given the market has suffered from overcapacity in the past.

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Appears on May 12, 2022, print edition as ‘Duke Realty Rebuffs Prologis Buyback Offer.’

https://www.wsj.com/articles/duke-realty-rejects-nearly-24-billion-buyout-offer-from-prologis-11652282895?mod=pls_whats_news_us_business_f Duke Realty Rejects Nearly $24 Billion Buyout Offer From Prologis

Edmund DeMarche

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