Qatar hopes to woo Songbird with higher bid
QATAR Investment Authority (QIA) and Brookfield Property Partners have gone hostile in their attempt to take control of Canary Wharf’s owner after taking a higher offer of 350p last night directly to shareholders.
The final all-cash offer for Songbird Estates, which came just hours before a deadline to submit revised bids, values the company at £2.6bn – or 33.6 per cent above its closing share price on 5 November when the pair made their first attempt.
Songbird rejected the initial 295-pence-a-share offer, saying it “significantly” undervalued the group. Its board is expected to reject this latest offer, according to sources last night. But the bidder will hope to persuade at least one of the larger investors to back it in order to put increased pressure on the board.
Last week, Songbird said a re-evaluation of its estate had increased the value of the company by £454m to £2.8bn.
The board has clashed with the bidders over how to value the company. Songbird’s method of valuing the company gives it 381p a share, while QIA and Brookfield’s method puts the value at 304p.
It is understood there have been little or no direct talks between the two sides.
The bidders last night said they had taken the offer straight to shareholders “to avoid a protracted debate on value and so minimise the uncertainty for the management of Canary Wharf Group.”
They added that Third Avenue Management, a shareholder with a 3.5 per cent stake, had already accepted the new offer price.
“[The offer] provides an attractive opportunity for Songbird shareholders to realise, in cash at a premium, their investment in a highly illiquid stock which has not paid a dividend over the past five years,” the bidders said.
Songbird declined to comment but is expected to make a response today.
Songbird is the majority owner of the east London financial district set up 25 years ago on former docklands.
QIA, the Gulf state’s sovereign wealth fund, already owns 28 per cent of Songbird and would need to buy out shareholders including New York-based investor Simon Glick, China Investment Corporation and Morgan Stanley Real Estate.
Glick is widely expected to be against the raised bid.
Brookfield is a US-listed industrials conglomerate, which holds 22 per cent in Canary Wharf Group.