Brookfield, QIA Canary Wharf bid accepted

The two investors gained board approval to take over Songbird Estates and gain control of Canary Wharf Group’s portfolio.

Toronto-based asset manager Brookfield Asset Management and Qatar’s sovereign wealth fund, Qatar Investment Authority (QIA), are set to buy Canary Wharf’s owner, London-listed property developer Songbird Estates, after Songbird’s board recommended its minority shareholders accept an improved £2.6 billion (€3.5 billion; $4 billion) offer.

The board of Songbird Estates, which owns 69.37 percent of the Canary Wharf Group, said “shareholders should accept” the 350p a share offer and that “directors who own Songbird Shares in their personal capacity…will do the same in respect of their own holdings.”
But, the board did add that it believes the price tag “does not reflect the full value of the business, its unique operating platform and its prospects.”

QIA and Brookfield started its pursuit of Songbird in November but its initial bid was rebuffed in January. The plan was to buy the remaining share capital they do not own in Songbird. Qatar Holdings, an investment arm of QIA, already owns 28.6 percent of Songbird, while Brookfield – the world’s second-largest real estate manager by assets managed – owns a 22.08 percent stake in Canary Wharf Group. Qatar also holds 125 million preference shares in Songbird.

The major stumbling block for the two investors was getting the approval of Songbird's other major shareholders China Investment Corporation, New York-based investor Simon Glick and Morgan Stanley Real Estate Investing, who together own more than 50 percent of Songbird shares. But, it is understood that each of these major shareholders intends to accept Brookfield and QIA’s improved offer.

The Canary Wharf east London estate is home to some of the world’s largest financial services groups. Its iconic buildings include towers One Canada Square, 25-30 Bank Street and One Churchill Place. CWG also owns significant joint venture stakes in 20 Fenchurch Street, known as The Walkie Talkie, in the City of London alongside Land Securities and the Shell Centre on the capital’s South Bank, with Qatar Holdings’ related company Qatari Diar.

The Canary Wharf Group is also entering a new wave of 6 million square feet of development projects in London including the 1.5 million square feet Shell Centre on London’s South Bank – again with Qatar. At its flagship Docklands estate, Wood Wharf, a 4.9 million square feet project includes 3,100 flats and homes, and 1.9 million square feet of offices, and Heron Quays West will comprise two offices of 700,000 square feet each.