Canary Wharf owner Songbird rejects revised $4.07 bn bid from QIA and Brookfield
05 December 2014
London's prestigious Canary Wharf owner Songbird Estates today rejected a sweetened £2.6 billion ($4.07 billion) bid from Qatar Investment Authority (QIA) and Brookfield Property Partners.
Songbird said the consortium's 350 pence per share offer "does not reflect the full value of the company, its unique position and future growth potential."
Qatar's sovereign wealth fund QIA and Brookfield, which saw their initial 295 pence-a-share or £2.18 billion ($3.45 billion) cash takeover offer rejected last month, (See: Canary Wharf majority owner Songbird rejects QIA - Brookfield's £2.18 bn bid) had on Thursday tabled a revised offer to 350 pence-a-share, valuing the London-based property group at £2.6 billion.
The revised offer came just two hours before the 5:00pm deadline of the UK Takeover Panel rules. Failure to table a fresh bid would have obliged the consortium to walk away from making a fresh bid for six months.
The consortium said that their revised offer has an "attractive premium" of 41.6 per cent to the six month weighted average price of Songbird's stock before its initial offer tabled on 5 November.
They also added that the revised cash offer was final, which meant that they now cannot raise it any further under the UK takeover rules.
But the revised 350p-a-share offer is still below the 381 pence a share valued late last month by Songbird's independent valuers.(See: Canary Wharf owner Songbird says its valuation of £2.82 bn exceeds QIA - Brookfield takeover price)
After rejecting the consortium's initial offer, Songbird informed its shareholders that it had asked its independent valuers to prepare an up-to-date valuation of the group's portfolio, who said that improvement in the London property investment market and developments in the Canary Wharf Estate has helped Songbird's adjusted net asset value (NAV) to rise by 19.2 per cent since 30 June to 381 pence a share on 27 November.
This new valuation represents a 19.2-per cent increase compared to the reported adjusted NAV of 319 pence per share on 30 June 2014.
Songbird said that it would write to shareholders with its detailed view of the offer in due course.
Songbird is the single-largest stakeholder in the Canary Wharf business district with a 69.3-per cent stake, while Brookfield is the second-largest with 22 per cent, while the rest is a free float.
Songbird, which is partially-listed on the stock market, is 28.6-per cent held by QIA, while New York investor Simon Glick, holds 25.07 per cent, China Investment Corporation 15.8 per cent, Morgan Stanley 8.53 per cent and US fund Third Avenue Management 3.2 per cent.
Apart from Canary Wharf, Songbird also holds stakes in the landmark "Walkie Talkie" skyscraper in the City and in the Shell Centre.
Songbird's prized asset is the 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 preeminence, much of the docks were lying idle till the Canary Wharf Group started developing the area in 1995.
The 97-acre Canary Wharf area boasts tall skyscrapers and officially employs over 100,000 people in 34 office buildings, over 280 shops, cafés, bars and restaurants. 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.
Leading banking groups like HSBC, Credit Suisse and Barclays; media and service firms, including Thomson Reuters and Trinity Mirror have their office in Canary Wharf.
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 former Olympic Village in Stratford East London.
Last month 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.