Canary Wharf nears decision on takeover deal
Canary Wharf is “actively involved in the process of reviewing indicative proposals,” Martin Jacomb, head of a committee of non-executive directors that is reviewing takeover bids said.
The company, led by Chairman Paul Reichmann who built Canary Wharf during the 1990s on derelict land near the River Thames, may be “asked to make some form of announcement this week, even if there is no conclusion,” said Alan Patterson, an analyst at HSBC Holdings. Canary Wharf has a market value of £1.6 billion.
Morgan Stanley and Goldman Sachs Group said they may bid jointly for Canary Wharf, with backing from New York-based shareholder Simon Glick.
Canada’s Brascan, which bought New York’s World Financial Center after it faltered under Canary Wharf’s leadership, also has approached the company.
Wendy Timmons, a Canary Wharf spokeswoman, has declined to comment, as has Andrew Grant, a spokesman for the Morgan Stanley-Goldman Sachs group, and Brascan spokeswoman Katherine Vyse.
Canary Wharf is grappling with lower office rents and higher vacancies that have dragged down its stock price by 33% since the end of 2000 and attracted bidders. The company on Thursday said the net value of its assets fell 31% to an adjusted 344 pence a share in the fiscal year ended June 30.
The Reichmann-led company built US-style towers and developed the world’s second-largest office park on land in east London formerly occupied by warehouses and disused docks. Today’s tenants include Morgan Stanley and Citigroup. The area will have about 14 million square feet of offices when finished in 2005.
Mr Reichmann, 72, said he hasn’t decided whether to join another bidder for Canary Wharf or form a takeover group himself.
Canary Wharf’s fortunes may be about to improve as business picks up, Merrill Lynch analyst Robert Fowlds said in a report to clients.
“We think the financial industry headcount cycle is no longer downward,” he said.
