FINANCE: The complex ownership of Canary Wharf will be simplified following conclusion of the battle to take over its parent company.
The new single entity could then be converted to a REIT.
This week majority shareholders in Songbird Estates, which owns 70% of Canary Wharf Group, landlord to the 16.2m sq ft E14 financial district, finally backed a 350p per share offer for the business, valuing it at £2.6bn.
Qatar Investment Authority and Brookfield Property offers have consistently been rejected by Songbird as undervaluing the company. But on Wednesday, in a surprise move, Songbird said that three of its major shareholders – investor Simon Glick (25.1%), China Investment Corporation (15.8%), and Morgan Stanley Real Estate Funds (8.5%) – were prepared to accept the offer, giving Brookfield/QIA a more than 85% shareholding. While the board said that it continued to believe the offer did “not reflect the full value of the business”, its attempts to achieve a higher offer had not been forthcoming.
QIA and Brookfield declined to comment on the process until acceptances from all shareholders had been received. However, its offer documents outline much of the jv’s plans.
Following the takeover, the pair plan to combine Songbird and CWG into one entity and cancel Songbird’s listing on AIM. Canary Wharf Group is then likely to be converted to a REIT.
Key CWG management will be retained, including chief executive George Iacobescu, with representatives from QIA and Brookfield added to a single board. The jv said “no material change to strategy” would be implemented.
Canary staff will share around £60m from the takeover, with Iacobescu taking a circa £3.5m share. A source said: “From Canary Wharf Group’s perspective it is still very much business as usual and the company will continue its development drive.
“George has been assured by the potential new shareholders of their full support for the group’s business plan and first-rate staff. He and the team are looking forward to working with them during what will be one of the busiest and most successful phases of Canary Wharf so far.”
