Sun, May 23, 2004 - Page 11 News List

Morgan Stanley declares victory in real estate fight

AP , LONDON

Morgan Stanley and its allies declared victory Friday in the auction of the property company Canary Wharf Group PLC and its east London office development, ending one of Britain's longest and hardest-fought takeover battles in recent years.

The US investment bank said its bid vehicle, Songbird Acquisition, had received support from investors controlling 60.9 percent of Canary Wharf's shares, above the 54 percent threshold required for success.

Songbird -- whose members include US property investor Simon Glick and Saudi investor Prince Al-Waleed bin Talal bin Abdul-Aziz -- defeated a rival bid led by the Canadian property company Brascan Corp.

Brascan said in a separate statement that only 19.4 percent of shareholders had accepted its bid.

Songbird's winning bid of £2.95 (US$5.28) per share in cash valued Canary Wharf's equity at £1.7 billion (US$3.04 billion). Including debt, it values Canary Wharf, the developer of a 1.26-million-square-meter office and retail complex in East London, at £4.7 billion (US$8.41 billion).

"We are delighted that this saga is finally over and that the highest offer has prevailed," said Stephane Theuriau, a Songbird director. "We look forward to managing the estate and optimizing value."

The company put itself up for sale last June after its shares plunged following the disclosure that it had made generous concessions to lure tenants in London's overbuilt office market.

Shares in Canary Wharf rose 1.3 percent Friday to £2.93 (US$5.27).

Canary Wharf's independent directors, who oversaw the sale, had recommended Songbird's bid over that of Brascan, which had offered £2.75 (US$4.92) a share in cash.

The Canary Wharf complex, which opened in 1991, provides many financial services companies with a high-tech alternative to London's traditional central business district, part of a zone of gentrification in a once run-down area.

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