Canary Wharf owners reject £2.2bn Qatar bid
A takeover bid for Canary Wharf has been quickly rejected by its current operator.
Canary Wharf is at the heart of London’s financial centre, and it’s been a business hub ever since it regenerated part of the capital’s East End. But that also makes it attractive to major investors from around the world, and its current operator has just rejected a major offer to take over the development.
Songbird Estates has announced that it has swiftly declined a possible offer for the company at a price of 295p in cash – a total of around £1.6 billion – from the Qatar Investment Authority (QIA) and US investor Brookfield Property Partners. The board considered the deal, it said, but after discussing it with advisors, unanimously agreed that it did not reflect the true value of the company overall.
“This proposal significantly undervalues Songbird and does not reflect the inherent value of the business and its underlying assets,” said David Pritchard, independent chairman of Songbird.
“The group has an exceptional management team with a clear vision to deliver additional shareholder value, including from our 11 million square foot development pipeline, the largest in London.”
At the moment it isn’t certain whether an offer will formally be made, or the terms on which it might rest. But it seems clear that the company is holding out for a much bigger payday if it is really to be taken over by the two institutions. After all, CityAM reports that its investment portfolio is worth £6.3 billion.
It could have been the biggest property deal for more than a decade within the UK – and it could end up being even larger if QIA and Brookfield come back with another offer. Shares in Songbird rose on news of the initial offer and fell when the rejection was announced, indicating that investors see the benefits of a deal.
QIA already owns a 29 per cent stake in Songbird, while Brookfield has a 22 per cent in Songbird subsidiary Canary Wharf Group. It makes sense that the two firms could want to tighten their hold on one of the districts with the greatest potential in London. But whether they will manage to claim it could rest on a much bigger offer.
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