Owner of Canary Wharf building in London rejects US$3.5 billion takeover offer

LONDON – The company that controls the landmark Canary Wharf building in London has rejected a US$3.5-billion takeover approach from the Qatar Investment Authority and Brookfield Property Partners (TSX:BPY), an affiliate of one of Canada’s largest asset management groups.

Songbird Estates chairman David Pritchard said Friday the offer of 295 pence-a-share, or 2.2 billion pounds, “significantly undervalues” the company.

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.

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, London’s new highest building, through a separate vehicle.

Brookfield Property Partners is a Bermuda-registered limited partnership 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.

Although Songbird was the winner in early 2004 after a prolonged battle with Brookfield, then called Brascan, the Canadian company retained a minority share in Canary Wharf and added to its holdings through subsequent transactions.

A Brookfield spokesman said the company had no comment Friday.

The Brookfield group has numerous real estate and property businesses throughout the world, primarily in the United States, Canada and Europe. Brookfield Asset Management has holdings in several industries, including real estate, power generation and forestry-related businesses. Brookfield Property Partners is one of its main real estate affiliates.

Songbird shares fell about three per cent Friday after surging nearly 23 per cent the previous day on speculation of an offer. Brookfield Property Partners gained 1.2 per cent on the Toronto Stock Exchange.

— With files from The Associated Press.