The Qataris have been rebuffed in their attempt to buy Canary Wharf and add yet another London landmark to a string of trophy assets in the capital.
Songbird, the company that controls the Docklands estate, including the tower at 1 Canada Square, on Friday rejected a joint takeover bid worth £2.2bn from the Qatar Investment Authority and a US commercial property firm.
Shares in part-listed Songbird had leapt almost 23% on Thursday when it confirmed City speculation that the Qataris and Brookfield were preparing a joint approach. They fell nearly 3% on Friday to 310.5p after the company rejected the 295p-a-share bid as too low.
Songbird chairman David Pritchard said: “This proposal significantly undervalues Songbird and does not reflect the inherent value of the business and its underlying assets.”
The Doha-based Qatar Investment Authority owns almost 27% of Songbird, while Brookfield has a 22% stake in Canary Wharf Group.
If Qatar came back with a successful bid the tiny energy-rich state would be adding buildings that make up some of the most famous parts of the London skyline to a range of investments that include Harrods and stakes in Sainsbury’s, Volkswagen and Porsche.
It reportedly bought HSBC’s 44-storey global headquarters in Canary Wharf for just over £1.1bn a fortnight ago. The deal made the tower – one of two built either side of the original 50-storey 1 Canada Square – London’s most expensive office building.
The attempt to take full control of Canary Wharf comes at a time of rising rents for office buildings in London and as the Docklands site prepares to expand for the first time since the banking crisis. Qatar built its investment in Canary Wharf in the aftermath of the crisis by pouring billions of pounds into a rescue fund that stopped the business collapsing because of debt.
Qatar’s property-buying spree in London started in 2008 with a 20% stake in Camden market, followed by the takeover of Harrods for £1.5bn. The department store was bought from Mohamed Al-Fayed, who had owned it for 25 years.
The stakes are held through a number of investment vehicles which also own stakes in Barclays bank and mining company Glencore as well as a 95% stake in the Shard, another landmark snapped up during the financial crisis when other investors took fright. The Olympic Village in Stratford, east London, and Chelsea Barracks, in west London, are also among its investments.
Winning control of the Canary Wharf estate, however, may not be straight forward because of Songbird’s complex ownership structure. While QIA is the biggest shareholder, there are other investors. Simon Glick, who helps run his diamond merchant family’s Glick Entities property empire, owns almost 26%. The China Investment Corporation, an investment arm of the Chinese state, owns 15.8%, while the US investment bank Morgan Stanley owns 8.5%. The bank was one of the key tenants when the development was first opened in the early 1990s.
Songbird also has stakes in the 20 Fenchurch Street Walkie Talkie skyscraper and in the Shell Centre on the South Bank – which it co-owns with another part of the Qatari investment empire.
One shareholder in Songbird, Standard Life, said: “We are pleased to see that the Songbird Chairman David Pritchard has rejected the bid proposal from the Qatar Investment Authority and Brookfield. From our perspective, the offer is so low it can’t be taken seriously and is not a credible basis for corporate engagement.”
