Qatar’s sovereign wealth fund and a North American investor have upped their joint bid for Songbird Estates, the owner of London’s Canary Wharf financial district, with an offer that values the company at £2.6bn ($4.1bn).
Songbird is the majority owner of the Canary Wharf estate, established about 25 years ago on former docks as a new financial zone. It is also a part owner of the landmark “Walkie Talkie” skyscraper in the City, London’s traditional business area.
It rejected an initial £2.2bn approach from the Qatar Investment Authority (QIA) and Brookfield Property Partners, saying it significantly undervalued the group. Last week, Songbird said it was worth £2.82bn thanks to an upturn in property markets.
The new all-cash offer of 350 pence per share came just hours before a deadline to submit revised bids and represents a 33.6% premium to Songbird’s closing share price on November 5, the day the QIA and Brookfield made their initial approach.
“The Songbird offer provides an attractive opportunity for Songbird shareholders to realise, in cash at a premium, their investment in a highly illiquid stock which has not paid a dividend over the past five years,” the two companies said yesterday, adding the offer was final and could not be increased.
The QIA already owns 28.6% of Songbird, while US-listed Brookfield, which operates and invests in office and industrial property, has a 22% stake in Canary Wharf Group.
Songbird declined to comment on the new bid.
It comes as Canary Wharf prepares to break ground on two major new additions – a 60-storey tower that will contain the first residential property on the estate and a new 20-acre waterside site providing 3,100 homes and office buildings, as well as a school and more retail space.
If the bid was successful it would add to Qatar’s already significant presence in London. The Shard, western Europe’s tallest skyscraper, and department store Harrods are among its high-profile properties.
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, which owns 15.8%.
The QIA and Brookfield said top 10 investor Third Avenue Management had accepted the offer at the new price.
Another shareholder in Songbird told Reuters ahead of the revised bid that it any new bid should be at least 400 pence per share, based on Songbird’s current share price. Songbird shares were last down 1.1% at 330 pence. In a separate statement yesterday, Brookfield – part of Canada’s Brookfield Asset Management – announced that the QIA had bought a 9% stake in it.