Update: Qatar Investment Authority Songbird bid rejected

The Qatar Investment Authority along with Brookfield Property Partners L.P. made an offer to buy Songbird Estates, which was rejected on Friday. The Qatari fund and Canadian company are making moves to gain control of Canary Wharf. The Qatari fund (QIA) already owns several London properties, including Western Europe’s tallest skyscraper The Shard, Chelsea Barracks and the Harrods department store.

QIA is also the preferred bidder to acquire HSBC’s Canary Wharf head office for £1.1 billion.

Songbird owns 69% of the Canary Wharf Group, the owner and developer of almost 0.40km² (100 acres) of property at Canary Wharf. They have offered 295 pence per Songbird share.

In a statement on Friday, Songbird said the all cash offer by Qatar Investment Authority (QIA) and Brookfield was rejected unanimously by the board, who said it materially undervalued the company.

Canary Wharf is expected to overtake The City soon as London’s premier financial district. (Photo: Canary Wharf Group)

Independent Chairman of Songbird, David Pritchard, 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.”

Canary Wharf has become a prize catch with the imminent opening of Crossrail and its bid to become the UK’s prime financial district, thus pushing The City into second place.

The Qatar investment Authority (QIA), already a 28.6% shareholder of Songbird, will need to buy out other shareholders.

In early trading on Friday, Songbird shares jumped 22%, making the company worth about £2.33 billion now.

Canary Wharf used to be the hub of London’s shipping trade. Today it has a working population exceeding 100,000. The headquarters of several British financial institutions are located there, including those of Barclays and HSBC, as well as the European regional head offices of dozens of major multinational banks, including Citi.