£1.6bn bid for Songbird hits a wrong note

THE owners of Canary Wharf yesterday rejected a takeover bid from Qatar, insisting the offer of £1.6bn ‘significantly undervalues’ the firm.

Shares in Songbird Estates, which owns 70pc of Canary Wharf Group, jumped 22pc to 320p on Thursday after the Qatar Investment Authority (QIA) and Canadian investor Brookfield tabled an offer. But they fell 3pc, or 10p, to 310p yesterday after Songbird rebuffed the 295p-a- share bid. Analysts believe an improved offer could be in the pipeline.

‘ The proposal significantly undervalues Songbird and does not reflect the inherent value of the business and its underlying assets,’ said Songbird chairman David Pritchard.

He pointed to the company’s 11m square foot development pipeline, the biggest in London. Songbird’s property portfolio is worth £6.3bn.

James Carswell, an analyst at stockbroker Peel Hunt, agreed. He said: ‘There’s a real possibility 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.’

Analysts at Oriel said: ‘We could comfortably justify a number closer to 400p given the near-term prospects pects for the company. company.’ And David Cumming, head of equities at Standard Life Investments, said: ‘From our perspective, the offer is so low it can’t be taken seriously and is not a credible basis for corporate engagement.’

The QIA owns 28.6pc of Songbird but will have to win over other shareholders to take control.

US investor Simon Glick owns nearly 26pc of Songbird, the China Investment Corporation has a 15.8pc stake, and Morgan Stanley Investment Management 8.5pc.

Brookfield holds 22pc of Canary Wharf Group.

The Qataris agreed to buy the iconic Canary Wharf tower, HSBC’s global headquarters, for more than £1.1bn last month.