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Canary Wharf valued at pounds 2bn

CANARY WHARF, the giant office development in London's docklands, has set the price range of its flotation at 280-350p, valuing the company at pounds 1.9bn to pounds 2.3bn and making it Europe's third largest property company.

The group published its prospectus yesterday, saying that it is placing 167m shares, representing some 25 per cent of the enlarged share capital.

The placing will be to institutions only, raising pounds 470m to pounds 585m. Peter Anderson, head of finance at Canary Wharf, said there would be no retail offer via private client stockbrokers or independent financial advisers.

Paul Reichmann's family founded the development in the 1980s only to lose control of it to the banks in the subsequent property crash. The secretive Canadian developer came back at the head of an investor group in 1995. His 11 per cent stake in Canary Wharf will increase to 15 per cent if he chooses to exercise warrants granted to him in the float - and if the shares top the strike price of 450p.

George Iacobescu, Canary Wharf's chairman, said that none of the existing investors want to sell following the float, and that they have all agreed to a six month "lock-in" period.

Altogether 17 senior executives of the group will be granted options in the float equivalent to just over 1.5 per cent of the share capital, exercisable as long as the shares rise by 15 per cent a year for three years.

These executives already have a roughly equal number of options granted previously, giving them a stake in the float worth a possible pounds 70m.