The Songbird and Canary Wharf Group choir will never sing in harmony again. Discord now runs too deep between the major shareholders fighting for control of the £6bn estate and its 11m sq ft development pipeline.
The world-class business run by maestro Sir George Iacobescu since 1997 has been fractured, whatever the outcome of the £2.2bn bid by the Qatar Investment Authority and Brookfield.
Finsbury has done a good job spinning for QIA/ Brookfield, which owns 22% of Canary Wharf Group, 70% owned by Songbird. What this means is that the PR company has drawn attention to weaknesses in Canary Wharf’s defences. One small example: I was provided with an unattributable quote and pointed towards the fact that the triple NAV of Songbird at 304p was not much higher than the original 295p bid.
This tale was too technical to make it into the Evening Standard. Sir George’s troops have not spun as hard, fast, or as personally. Imagine their righteous fury at the tale that did make the papers: how Rothschild head of real estate Alex Midgen was somehow conflicted by having a seat on the board of both Songbird and 26% shareholder Simo Glick, who is opposed to the sale.
By Wednesday the QIA held pledges from minor shareholders representing 6% of Songbird’s equity. QIA holds 29%, taking its voting power to 35%. If the China Investment Corporation sells its 15.8% stake to them, it is pretty much game over. The FT’s influential Lex column suggested on Tuesday that Songbird shareholders should take the 350p offer.
The outcome of the bid is as uncertain as the intentions of the bidders. What does Brookfield want – just the real estate, or to subsume Canary Wharf’s five-star development team into Brookfield’s Multiplex subsidiary? What is the QIA playing at? Why was its chief executive replaced last week? By the way, this happened days after QIA’s spinners indicated there would be no final bid – and days before one came.
The only thing that is certain is that if QIA/Brookfield wins, things will never be the same. Trouble is, exactly the same thing goes if Sir George, now 69, wins. The curtains on how M&A deals are spun are normally kept closed. But sometimes you have to understand the spin to appreciate the animosities.
FCA: time to sharpen up
The Financial Conduct Authority announced a re-organisation last Monday. The deck chairs were re-arranged ahead of a report on Wednesday criticising the financial watchdog. The FCA has promised to “sharpen up”. Mimicking its sharp US counterpart would help. In September JLL was fined $150,000 by the US Securities and Exchange Commission for tardy notification of director share transfers, which was not “timely filed due to (JLL’s) negligent procedures”.
he agent had missed filing deadlines 70 times in the 24 months. Minor infractions, surely? Yes – but JLL was one of just 36 firms fined under the SEC’s new “broken window” policy. This stratagem is based on the theory that if you punish the first person to break glass, it will discourage others from smashing the building.
It’s Greek to me
You might imagine the owner of two mansions on London’s Park Lane would instruct Knight Frank or Savills to conduct their sale. But no, numbers 94 and 95 were being marketed until last week in a more cost-effective manner; a sticky-taped notice in an upper window, inviting parties to call an Athens number.
The terrace homes, once occupied by squatters, have long stood empty. They must be worth tens of millions to the mysterious owner of the 185-year lease taken from Grosvenor in 1999.
So, why the cheapo sales pitch? Let’s dial and find out: “Hello?” A polite but reticent man answers in what sounds like a Greek accent. “Er… I see from a notice you are selling houses in Park Lane.” “You are too late. We have taken down the notice,” he answers. “Oh! Have the houses been sold?” He cannot say.
Who is the owner? He cannot say, but adds hastily, “I am just the agent.” “OK, well, what’s your name?” “I cannot say. Goodbye.”
