Qatar makes £1.6bn bid for Canary Wharf owner Songbird

 
Tim Wallace
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Songbird Estates owns a majority stake in the Canary Wharf Group

Qatar wants to buy up Canary Wharf in a £1.6bn deal, showing the oil rich state’s determined interest in snapping up vast chunks of valuable and iconic London property.

The deal would be one of the biggest property sales ever in the UK, and will extend Qatar’s reach over London landmarks, which already includes the Shard, Harrods and Chelsea Barracks.
Taking control of Canary Wharf Group will give it a big stake in 8m square feet of London office space, a slice of the Walkie Talkie tower and sites such as the Canary Wharf Crossrail station. This would be done by buying Songbird Estates, which owns a majority stake in the Canary Wharf Group.
The deal also represents another major step in London’s development into a global city. Canary Wharf has played a central and iconic role in transforming the image of the capital and the UK from a post-industrial poor man of Europe, into a modern and dynamic, high value economy.
The Isle of Dogs’ development and recovery ran from the early 1980s, with an experiment in cutting taxes and through major infrastructure construction.
By the late 1990s and early 2000s, it resulted in an intense concentration of global banks and finance firms in an entirely transformed area. And Qatar’s bid to own the land gives an extra dimension to this worldwide interest in Canary Wharf.
But if the Qatar Investment Authority (QIA) and its partners, Brookfield, want to buy the rest of Songbird, they will have to deal with a series of other major investors.
In addition, the plan itself has pushed up the price of Songbird’s shares. The QIA approached Songbird’s board on Wednesday and the news was leaked yesterday sending shares up by a dizzying 22 per cent on the day.
Qatar owns 28.6 per cent of Songbird currently. The remaining 71.4 per cent has a market value of £1.6bn, after the leap in the share price yesterday.
US property billionaire Simon Glick’s firm Glick Entities owns 25.9 per cent, followed by the China Investment Corporation on 15.8 per cent and Morgan Stanley on 8.5 per cent. Glick did not comment yesterday, but is believed to be opposed to the deal.
His relationship with the Docklands is longstanding, having been an acquaintance of Canadian property guru Paul Reichmann, who founded Canary Wharf. Reichmann, who lost control of the tower in the 1990s, died last year.
The remaining 21.1 per cent is owned publicly, with investors including household names such as UBS, Barclays and Standard Life. On top of that, the purchasing pair will have to make an offer for the other shares in Canary Wharf Group.
Songbird owns 69.4 per cent while Brookfield owns 22.1 per cent.
They would have to offer to buy out major funds Ontario Teachers and Franklin Mutual, which own another 8.4 per cent, as well as the other tiny minority investors.
“The board of Songbird will consider this approach in light of what is in the best interests of the shareholders in the company as a whole and in the meantime Songbird shareholders are advised to take no action,” Songbird said in a market notice yesterday.
QIA and Brookfield have 28 days to finalise their offer or withdraw their interest.

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