The owner of Canary Wharf, Songbird, has admitted defeat in its battle against a £2.6bn bid from the Qatari Investment Authority and Canadian property investor Brookfield, saying its three major shareholders intend to accept it.
This means the Qatari fund can add east London’s financial district, with its cluster of towers, to a string of other prized assets, including Harrods and the Shard.
The Songbird board, chaired by David Pritchard, said it would recommend the offer to smaller investors, ahead of Thursday’s deadline, once holders of 90% of the shares have accepted the terms, making the offer unconditional. Songbird directors who own shares would also then accept for their own holdings.
Qatar, Songbird’s biggest shareholder with a 28.6% stake, and Brookfield have been trying to gain control of the property company since November.
The backing from New York investor Simon Glick, the China Investment Corporation and Morgan Stanley, the three biggest shareholders after the Qatari fund, means that QIA and Brookfield have secured 85.6% support.
Songbird owns the bulk of Canary Wharf Group, the owner of the Docklands estate.
It is expanding for the first time since the banking crisis with plans for 3,000 homes at its eastern edge. Songbird also owns a 50% stake in the Walkie Talkie skyscraper in the City and the Shell Centre on the South Bank, which it co-owns with QIA subsidiary Qatari Diar.
Songbird held talks with other parties about a higher offer but they have come to nothing. The company maintained that the final offer of 350p a share, up from the initial approach of 295p, was too low, and formally rejected the terms on 12 January. An independent valuation carried out in November put Songbird’s value at 381p a share.
Minority investors Third Avenue Management, Madison International Realty and EMS Capital have already indicated their willingness to sell.
The QIA stepped in with the China Investment Corporation to rescue Songbird in 2009 when the business came close to collapsing under its debt.
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