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Tue 30 Dec 2014 08:04 PM

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Canary Wharf owner urges no action on $4bn Qatar-led bid

Songbird Estates tells shareholders that 350p per share cash offer undervalues the company

Canary Wharf owner urges no action on $4bn Qatar-led bid
(Getty Images)

Canary Wharf owner Songbird Estates Plc has told shareholders to take no action on a Qatari-led $4 billion takeover bid, reiterating that the 350 pence 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 on Tuesday it would send a formal response within 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 percent at 317p by 1507 GMT, a near 10 percent discount to the offer that showed investor scepticism it will go through.

Songbird said this month that the 2.6 billion pound ($4 billion) offer undervalued the company but stopped short of formally rejecting it, as it had done with a previous 2.2 billion pound 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 percent of the company's "free float" of readily tradeable shares.

But 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 percent, and China's sovereign wealth fund, with 15.8 percent.

Shareholders have until January 29 to accept the offer.

Songbird owns 69 percent of Canary Wharf Group, established 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 percent stake in Songbird, while Brookfield has 22 percent of Canary Wharf Group. They said on Tuesday they planned to retain key management in Canary Wharf Group, singling out Chairman and CEO George Iacobescu for praise, if their bid was successful.

US fund Franklin Mutual Advisers, which owns around 7 percent 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.

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