Brookfield Property Partners and Qatar up bid to Canary Wharf owner to US$4.1B

LONDON – Brookfield Property Partners (TSX:BPY) and Qatar Investment Authority have increased their bid for Songbird Estates, the owner of several buildings in London’s Canary Wharf financial district.

It says the offer values Songbird at approximately US$4.1 billion, or 2.6 billion pounds. The companies say the all-cash offer of 350 pence per share is a 33.6 per cent premium to Songbird’s share price on Nov. 5 — the day before it became public that it had been approached with an initial offer.

Last month, Songbird rejected a US$3.5 billion takeover offer from the two firms, saying that it “significantly undervalues” the company.

“QIA and Brookfield believe the Songbird Final Offer Price to be full and fair, based on their view of the fundamental value of Songbird’s existing assets, in particular in light of the changing risk profile of Canary Wharf Group, and the substantial premium to Songbird’s pre-approach share price,” Brookfield and Qatar said in a statement Thursday.

It added that it decided to go with a final offer to “avoid a protracted debate on value” of Songbird Estates.

Songbird owns 69 per cent of Canary Wharf Group, which has a number of prime addresses across London, while Brookfield Property Partners holds a 22.08 per cent stake in Canary Wharf Group.

The main tower in Canary Wharf — a major office development begun in the 1980s by Toronto-based Olympia & York — is home to some of the world’s biggest banks.

Brookfield Property Partners is controlled by Toronto-based Brookfield Asset Management (TSX:BAM.A), which led an unsuccessful attempt to acquire control of Canary Wharf about a decade ago.

Brookfield Asset Management has holdings in several industries, including real estate, power generation and forestry-related businesses.

The Qatar Investment Authority has interests across London, including Harrods as well as a 29 per cent stake in Songbird. Qatar is also behind the Shard skyscraper in London.

— With files from The Associated Press.