Songbird spurns improved €3.3b Brookfield-Qatari takeover offer

Songbird Estates, the listed majority owner of London's Canary Wharf business district, has rejected the improved and final takeover offer tabled on Thursday by Qatar Investment Authority and its North American JV partner, Brookfield Property Partners.

In its reaction to the formal bid of 350 pence per Songbird share, Songbird said on Friday: 'The board believes the offer from QIA and Brookfield does not reflect the full value of the company, its unique position and future growth potential.

'The board draws the attention of shareholders to its announcement dated 28 November 2014 which sets out the pro forma adjusted net asset value of 381 pence per share as at 27 November 2014 (the November Adjusted NAV) and the other areas of value within the company not reflected in the November Adjusted NAV.

'The board will respond to the QIA and Brookfield announcement and will write to Songbird shareholders with its detailed view of the offer in due course,' the AIM London-listed company said in a statement.

The formal offer of 350 pence per Songbird share values Songbird at £2.6 bn (€3.3 bn), and is 55 pence higher than the joint venture's previous offer which Songbird rejected as too low.

Following the rejection of the first offer, Songbird said its pro forma adjusted net asset value at 28 November was 381 pence per share, a 19.2% increase over the previously published NAV at end-June 2014. The company owns 69.37% of Canary Wharf Group, while Brookfield holds 22.08%.

QIA, Qatar's sovereign wealth fund, in turn, already owns 28.6% of Songbird.

A QIA spokesperson said on Thursday: 'With this offer, we are seeking to simplify the ownership and governance structure of Songbird, and ultimately also Canary Wharf Group. The final offer price represents a significant premium to Songbird's fundamental value and to the pre-approach share price even following a significant increase in the reported valuation and the share price of Songbird over the last 12 months. The Songbird offer provides what we believe is a highly attractive opportunity for shareholders to exit an illiquid investment.'

Ric Clark, CEO of Brookfield, added: 'As long-term investors in Canary Wharf, we are pleased to be in a position to make this compelling offer to the shareholders of Songbird. It provides shareholders with the opportunity to realise the very significant increase in value that Songbird has experienced over the last year. The offer is being made as Canary Wharf embarks on an ambitious development programme that will alter its risk profile.'

QATAR BUYS INTO BROOKFIELD
Also on Thursday, Brookfield announced that it had issued $1.8 bn (€1.4 bn) of exchangeable preferred equity securities in Brookfield to QIA. This gives the Qataris a 9% ownership stake in Brookfield, which is listed in New York and Toronto.

Brookfield's Clark stated, 'The placement of $1.8 bn of equity is a great endorsement of our global premier asset strategy. We are on the path to building the world's leading portfolio of best-in-class property assets. This capital will enable us to launch BPY to the next phase.'

QIA said, 'We are making this strategic investment in Brookfield Property Partners as part of our investment plan to diversify globally in the real estate sector. This transaction takes our existing institutional relationship with Brookfield Asset Management to the next level, establishing a global platform for us to continue our collaboration with Brookfield.'

In recent days Qatar replaced QIA's chief executive, Ahmed al-Sayed, with Sheikh Abdullah bin Mohamed bin Saud al-Thani.