Canary Wharf confirmed yesterday that its board is working on a possible restructuring of the company in case no formal bids for the company are tabled. The news came as it emerged that the Glick family, who have made their money from diamond trading, may play a vital part in the bid battle for one of Britain's most high-profile property companies. The Glick family controls 14 per cent of Canary Wharf shares, the largest individual holding in the company.
If the Glick family team up with the consortium which involves the chairman, Paul Reichmann, it would make a formidable grouping. Mr Reichmann already owns 7.7 per cent of the stock and on Tuesday said he was considering working with other potential bidders. These include Goldman Sachs, Morgan Stanley and Brascan, a Canadian property group.
Indicative offers are due to be put to Canary Wharf's advisers, Lazards, today. However, to protect shareholders from the possibility of bid talks collapsing, the board's independent directors are working on plans to return funds to shareholders. This could involve selling various freeholds or the demerger of parts of the development business. "You would expect the independent directors to be working on a contingency plan," one source said.
Canary Wharf owns most of the freeholds in its developments, though in some cases, such as the HSBC head office, it built the office and then sold it to the bank, together with the freehold interest. Freehold sales would enable Canary Wharf to pacify shareholders with special dividends or share buy-backs.
However, many of the buildings are securitised, with money borrowed against the income stream of the rents. This would make refinancing them difficult.
Canary Wharf is expected to issue a statement today giving an update on the bid process. It is not clear how much detail will be included or whether Mr Reichmann will meet the deadline. It is thought he is principally interested in bidding if other offers fall below 310p per share, valuing the company at £1.8bn.
Other major shareholders include Deutsche Asset Management with 5.5 per cent, Scottish Widows with 4.2 per cent and Legal & General with 3.4 per cent.
Canary Wharf issued a statement in June saying it had received approaches about a possible bid. Mr Reichmann's willingness to participate emerged at the weekend.
The shares closed 1.5p lower at 265.5p yesterday.
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