Songbird Estates has claimed the formal offer for the owner of Canary Wharf “does not reflect the full value of the company”.

Qatar Investment Authority and Brookfield Partners posted their formal £2.6bn offer to the London Stock Exchange this morning. The bidders said they would keep the current management of Canary Wharf in place if successful, but Songbird chairman David Pritchard rebuffed the 350p offer and asked shareholders to wait until they receive a response circular form Songbird before making their decision on bid.
Pritchard said: “Canary Wharf Group has put in place an unparalleled platform for continued long-term value creation at the unique Canary Wharf estate and elsewhere in London. With the commencement of four separate development projects delivering 22 buildings over the next 5 years, an overall development pipeline of more than 11m sq ft and a world class management team, we believe that Songbird and Canary Wharf Group have an exciting future. 

“The board of Songbird remains of the view that the offer from QIA and Brookfield does not reflect the full value of the company, its unique operating platform and future growth potential.”
In its offer document QIA and Brookfield said they were “supportive of the management’s current business plan and wish to retain the existing management”. They said they recognised chairman and chief executive officer Sir George Iacobescu and senior management’s ability to create value over an extended period of time.
Earlier this month takeover target Songbird Estates said the revised offer of 350p per share undervalued the company. The second bid came after its original offer of 295p per share made in November was rejected.
The Qataris already own 28.6% of Songbird, whose investment portfolio is worth £6.3bn. Meanwhile Brookfield has a 22% stake in the Canary Wharf Group, after competing with Songbird to take control of the company in 2004.
Presently the pair’s offer has backing from investors such as Third Avenue Management, Madison International Realty and EMS Capital, in total around 32% of Songbird’s shares, according to the document released today.
The bidders also confirmed today they had the support of U.S. fund manager Franklin Mutual Adviser, as Property Week revealed earlier this month.
Franklin owns approximately 7% of Canary Wharf Group. If the QIA and Brookfield bid for Songbird is successful, the bidders would make an offer for all Canary Wharf Group shares not held by Songbird, they added in the offer document.