Songbird advises no action on bid

Canary Wharf owner Songbird Estates Plc has told shareholders to take no action on a Qatari-led $4bn (€3.28bn) takeover bid, reiterating that the 350p per share cash offer undervalued the company.

Qatar Investment Authority (QIA) and US investor Brookfield Property Partners LP earlier published their final offer document for the majority owner of the London financial district and Songbird said yesterday it would send a formal response in the next 14 days.

“The board believes that the offer from QIA and Brookfield does not reflect the full value of the company, its unique operating platform and future growth potential”, Songbird said in a statement, advising shareholders to do nothing until they receive Songbird’s official response.

Songbird shares were down 1% at 317p yesterday, a near 10% discount to the offer that showed investor scepticism it will go through.

Songbird said this month the £2.6bn (€3.32bn) offer undervalued the company but stopped short of formally rejecting it, as it had done with a previous £2.2bn proposal. QIA and Brookfield said they already had commitments to the Songbird deal from shareholders Third Avenue Management, Madison International and EMS Capital, amounting to around 32% of the company’s “free float” of readily tradeable shares.

However, any deal would have to gain the approval of Songbird’s other major shareholders, including New York-based investor Simon Glick, who has almost 26%, and China’s sovereign wealth fund, with 15.8%.

Shareholders have until January 29 to accept the offer. Songbird owns 69% of Canary Wharf Group, set up about 25 years ago on former docks as a new financial zone. It is also a part-owner of the Walkie Talkie skyscraper in the City, London’s traditional business area.

QIA already has a 29% stake in Songbird, while Brookfield has 22% of Canary Wharf Group. They said yesterday they planned to retain key management in Canary Wharf Group, singling out chairman and chief executive George Iacobescu for praise, if their bid was successful.

US fund Franklin Mutual Advisers, which owns around 7% of Canary Wharf Group, has written to Songbird to indicate it plans to accept any cash offer for its Canary Wharf Group shares, they added.

If the bid for Songbird is successful, QIA and Brookfield said they would make an offer for all Canary Wharf Group shares not held by Songbird.