The £2.6bn battle for control of Songbird Estates took an intriguing twist as its Qatari suitors put the legendary City financier Ken Costa on the board of the Canary Wharf developer.
As a 28.6 per cent shareholder in Songbird, the Qatar Investment Authority (QIA) has the right to appoint three directors, but one of its slots has been empty since September.
Mr Costa, whose eponymous boutique advisory firm is working with the QIA and Canada’s Brookfield on their bid, has been a leading light in investment banking for more than 35 years, chairing Lazard and the European arm of UBS’s investment bank. Barclays, Citigroup and HSBC are the bid team’s other advisers.
Mr Costa will sit on the board with fellow QIA appointees Khaled Sultan al-Rabban and Sheikh Mohammed Bin Hamad bin Jassim al-Thani, although the trio must excuse themselves from board bid discussions.
The suitors have offered 350p a share for Songbird, which is itself a 69 per cent shareholder in Canary Wharf Group (CWG). Songbird has, however, put a much higher price on the business – at least 381p a share – in a booming London commercial property market, insisting there is more to come from the group’s huge development pipeline.
The strength of the pipeline was underlined yesterday as the London Mayor Boris Johnson approved plans to develop the Wood Wharf site to the east of the original Canary Wharf estate with up to 3,600 homes, potentially creating around 17,000 jobs. There will also be around 1.9 million square feet of new office space under the proposals
The CWG chairman Sir George Iacobescu – the driving force behind the modern Canary Wharf – said: “This new major district will reinforce Canary Wharf’s position into the future as one of the most exciting and vibrant places to live and work in London.” The first phase is not expected to be completed until 2020.
The QIA and Brookfield have, however, questioned whether Songbird has the financial firepower to deliver Wood Wharf. Their offer document said the £2.5bn plans would “require substantial funding to be raised, reducing Songbird’s ability to return capital to shareholders”.
The bidders have the support of around 35 per cent of Songbird shares, although the fate of the offer will depend on one of Songbird’s major shareholders switching sides.Reuse content