Qatar’s $3.5bn bid for London’s Canary Wharf doesn’t make Songbird sing

The board of Songbird Estates, the company that owns 69% of Canary Wharf in London Docklands, has unanimously turned down a takeover bid from Qatar’s sovereign wealth fund, the Qatari Investment Authority (QIA) and US developer Brookfield Property Partners.  

David Pritchard, Songbird’s chairman, said the offer of 295p a share, or about $3.5bn, "significantly undervalues" the firm.  

He said: "This proposal significantly undervalues Songbird and does not reflect the inherent value of the business and its underlying assets. The group has an exceptional management team with a clear vision to deliver additional shareholder value, including from our 11 million square foot development pipeline, the largest in London." 

James Carswell, a real estate analyst at agent Peel Hunt, told the BBC that he was not surprised that the offer was rejected, describing it as "far too low". He said: "There’s a real possibility that QIA and Brookfield could come back with another offer. In our view, it needs to be in the region of 350p a share to be accepted." 

Under City of London takeover rules, Qatar and Brookfield have until 4 December to make a final offer for Songbird or they must walk away for up to six months. 

Songbird has an investment portfolio worth about $10bn. Shares in the company rose 20% to £3.20 on news of the approach, although they fell after it was rejected.  

Brookfield holds about 22% of shares in Canary Wharf Group, the Songbird subsidiary that directly owns the assets. The Qatari Investment Authority (QIA), which earlier this week bought the HSBC tower in London Docklands for $1.1bn, holds a 29% stake in Songbird.  

Qatar has a certain amount of history with Canary Wharf: the government backed a $16bn rescue plan after the 2008 financial crash.  

Canary Wharf was developed in the 1980s as a second financial centre for London. It gained its name because it handled tomatoes imported from the Canary Islands.