Canary squeeze on Morgan Stanley

The board of Canary Wharf finally conceded the bid it has received from Brascan is "fair and reasonable" yesterday, but held back from recommending the deal, in case its rival Morgan Stanley comes up with something better.

Brascan, a Canadian developer which has formed an alliance with Canary Wharf's chairman, Paul Reichmann, to bid for the property group, offered 275p a share, or £1.6bn, on 12 February, through its bid vehicle CWGA. That matched an earlier, recommended, offer from Morgan Stanley.

The Brascan approach came with enough shareholder support to block Morgan Stanley. However, the Canary Wharf board has kept its recommendation with Morgan Stanley, which is using a bid vehicle called Silvestor, and this remained the case yesterday - otherwise a £14m break fee would become payable. Morgan Stanley has said it is considering its options. The Canary Wharf board urged shareholders not to accept the Brascan offer "at this time" and to wait to see if Morgan Stanley can do better.

Canary Wharf said: "Silvestor is expected to clarify its position during the course of CWGA's offer timetable. Shareholders should be aware that accepting the CWGA Offer at this time may prevent Silvestor from making a superior proposal."

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