Qatar Investment Authority seeks control of Canary Wharf owner Songbird Estates
07 November 2014
The Qatar Investment Authority (QIA) has teamed up with Canadian investment group Brookfield Property Partners LP and approached Songbird Estates about a possible takeover of London's most expensive and prestigious financial hub.
''The board of Songbird notes the recent press speculation regarding the Company and that yesterday afternoon it received a preliminary joint approach from Qatar Investment Authority and Brookfield Property Partners L.P. expressing an interest in formulating an offer for the company,'' Songbird said in a press release.
''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, the release added.
QIA and Brookfield have until 4 December to table a bid as per the UK takeovers rules or walk away for six months.
Songbird, which is partially listed on the London stock market, currently has a market cap of £2.3 billion, but recent evaluation of the company's assets was valued at more than £6.28 billion.
Qatar Investment Authority already owns 28.6-per cent stake in Songbird, while New York investor Simon Glick, owns 25.07 per cent, China's Investment Corporation holds 15.8 per cent, Morgan Stanley 8.53 per cent and US fund Third Avenue Management owns 3.2 per cent.
Songbird owns 69.3 per cent of Canary Wharf business district, holds stakes in the landmark "Walkie Talkie" skyscraper in the City and in the Shell Centre, while Brookfield is the second largest shareholder in Canary Wharf behind Songbird holding 22 per cent.
QIA is one of London's biggest landmark property owners, holding stakes in London's tallest building The Shard, Chelsea Barracks, luxury department store Harrods earlier owned by Mohamed al-Fayed, and the Olympic Village in Stratford East London.
Last week it agreed to buy HSBC's global headquarters in Canary Wharf for £1.1 billion
It also holds stakes in British bank Barclays Plc, London-listed miner Glencore International and Credit Suisse's headquarters in London.
Songbird's prized asset is Canary Wharf, which until 1961 was one of the world's busiest docks serving huge industrial areas of east London and beyond. But with Britain losing its industrial capacity and power, much of the docks were laying idle till the Canary Wharf Group started developing the area in 1995.
At the end of 2007, the area boasts of tall skyscrapers and the official number of people employed on Canary Wharf was 93,000. It has become a shopping destination, particularly with the opening of the Jubilee Place shopping centre in 2004.
The Canary Wharf financial district today rivals London's traditional financial centre, The Square Mile and holds three of the tallest buildings in the UK, One Canada Square, known as the Canary Wharf Tower, 8 Canada Square and the Citigroup Centre.
Many major banks like HSBC, Credit Suisse and Barclays and news media and service firms, including Thomson Reuters and Trinity Mirror have their office in Canary Wharf.