Qataris make a move to own Canary Wharfs £6bn estate

Posted by JR-Capital in Press

Songbird rejects Qatari advance on Canary Wharf’s £6bn estate

By Ashley Armstrong and Denise Roland- The Daily Telegraph


Qatar’s sovereign wealth fund is plotting its next move to seize control of Canary Wharf after Songbird Estates, the majority owner of the Docklands site, “unanimously” rejected the emirate’s £2.2bn takeover approach.


The Qatar Investment Authority – which already owns swathes of London real estate including the Shard, Chelsea Barracks, Harrods and the Olympic Village in east London – made a 295p cash bid alongside Canada’s Brookfield to take Canary Wharf private.


Songbird chairman David Pritchard said yesterday that the proposal “significantly undervalues Songbird and does not reflect the inherent value of the business and its underlying assets”.

Standard Life, which owns a 3pc stake in Songbird making it the sixth biggest investor, said the offer is ” so low it can’t be taken seriously and is not a credible basis for corporate engagement.”


“We are pleased to see that the Songbird Chairman David Pritchard has rejected the bid proposal from the Qatar Investment Authority and Brookfield”, David Cumming, head of equities at Standard Life Investments said.

However, sources reckoned this was merely the first step in a battle for control, and the oil and gas rich state’s 295p was merely an opening gambit from the joint bidders.


Unlike the protracted takeover tussle for Canary Wharf in 2004, Qatar and Brookfield have just 28 days to win over Songbird’s board and must make a firm bid or walk away by 4 December under UK takeover rules.

Qatar already owns a 28.6pc stake in Songbird, while Brookfield owns a 22pc stake in the Canary Wharf development. A takeover of Songbird would result in the Canadian and emirate with 91pc control of London’s second most famous financial district. The rest is large161ly owned by US fund Franklin Resources.


Analysts deemed the Qatari bid approach as “far too low” as it was at a discount to both the company’s share price following the bid speculation and an 8pc discount to Songbird’s net asset value of 319p.

Miranda Cockburn, analyst at Oriel Securities, said that Songbird could “comfortably justify a number closer to 400p”, which would value the business at £3bn.


Industry experts also said that the offer did not ascribe sufficient value to Songbird’s next stage of growth as it gears up for construction on its residential Wood Wharf site, which will add 3,000 homes and the arrival of Crossrail in 2018 to Canary Wharf.


Any deal rests on the approval of Songbird’s second biggest shareholder, New York investor Simon Glick, who controls 25pc of the company, and China’s Investment Corporation, which owns 15.8pc through its Land Breeze holding company.


“The board of Songbird will only be open to serious discussions on a bid at a significant premium to net asset value (NAV) per share – meaning a revised offer of at least 340p to 350p per share to make talks serious”, John Collier-Wright, of JR Capital which invests Gulf money into UK real estate, said.


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03 Jun 2015