Qatari sovereign wealth fund buys Canary Wharf for $4bn

A joint venture between Qatar’s sovereign wealth fund and Canadian developer Brookfield Property Partners is poised to take control of Canary Wharf for $4bn after the three largest shareholders in the present owner, Songbird Estates, accepted the deal.  

Songbird conceded defeat after New York investor Simon Glick, the China Investment Corporation and Morgan Stanley said they would support the deal. As the Qatar Investment Authority (QIA) is the largest shareholder with 29% of Songbird’s shares, the deal had 86% support. 

Songbird had hoped to find another bidder willing to offer more, however these came to nothing, partly owing to the company’s complex ownership structure.  

Songbird had rejected a $3.5bn bid from QIA and Brookfield in November last year. David Pritchard, the chairman of the company, said at the time that the offer "significantly undervalued" the company, which has an 11 million square foot development pipeline and an investment portfolio worth $10bn. It then rejected a final offer of $4bn, or 350p a share, on 12 January. An independent valuation carried out at the time of the initial bid had put Songbird’s value at 381p a share. 

The company owns the bulk of Canary Wharf Group, which in turn owns the Docklands estate, which acts as London’s second financial hub after the City. It is expanding for the first time since the 2008 slump with plans for 3,100 homes at Wood Wharf at its eastern edge. Songbird also owns half of the Walkie Talkie skyscraper in the City and the Shell Centre on the South Bank, which it is redeveloping with QIA subsidiary Qatari Diar. 

Songbird has long been seen as a desirable asset, and in the past talks have been held with the late Paul Reichmann, who was chairman of Songbird’s Canary Wharf subsidiary, and there were rumours that Canada’s Brascan Corporation might make a bid. It was also suggested in the early 2000s that Glick, who now owns 26% of Songbird, might team up with Morgan Stanley and Goldman Sachs to make an offer. 

Photograph: Canary Wharf with its three main towers (right to left): Citigroup, One Canada Square, and HSBC (Source: Diliff/Wikimedia Commons)

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