Songbird minority shareholders hold out for minimum 380p per share offer from QIA and Brookfield
Songbird Estates’ minority shareholders have said the Qatar Investment Authority (QIA) and Brookfield Group would need to offer a minimum of 380p to secure support for their takeover offer, The Times reported. The newspaper quoted one of Songbird’s leading minority investors, who said they would not support any agreed offer of less than 380p per share for the listed UK-based property company.
The Daily Mail reported dealer chatter that Songbird Estates is in line for an imminent knockout cash bid pitched at around the 400p-per-share mark.
As previously reported, Songbird Estates last week said it had rejected an initial takeover offer of 295p per share from QIA and Brookfield, a listed Canadian property company.
The shareholder quoted by The Times said estimates show that the value of Songbird’s assets, including GBP 6.3bn of properties in London’s Canary Wharf district, will increase by more than had previously been forecast. The investor added that Songbird has a strong pipeline of residential and office developments and pointed out that the Crossrail rail link would increase rental values.
The QIA is Songbird Estates’ biggest shareholder with a stake of slightly more than 28%. Brookfield holds a 22% stake in Songbird’s operating subsidiary Canary Wharf Group (CWG). Songbird holds a stake of close to 70% in CWG.
Minority shareholders in Songbird include Majedie Asset Management and Kames Capital, the item said. The four main investors in Songbird – the QIA, Glick Entities, China Investment Corp (CIC) and Morgan Stanley Real Estate – could play a decisive part in the takeover process, the article added.
Analysts cited by the report estimated that the bidders may need to increase their opening bid by 35%.
One analyst cited by the newspaper said QIA and Brookfield’s initial bid was 7.5% short of Songbird’s net asset value (NAV). Of ten recent successful offers for UK property companies, only three have been completed at a valuation less than the target’s NAV. The other seven deals were agreed at an average premium of 16% to NAV, the analyst added.
Songbird Estates’ share price closed 5.5p down at 325p on the London Stock Exchange yesterday, 11 November, giving the group a market capitalisation of GBP 2.40bn (EUR 3.06bn).
Source The Times (London), Daily Mail