Reichmann confirms interest in consortium bid for Canary Wharf as deadline looms

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The Independent Online

Paul Reichmann confirmed last night that he is considering forming a consortium to bid for Canary Wharf, the property company that has transformed London's skyline with its Docklands office developments.

Mr Reichmann, the company's 72-year-old executive chairman, confirmed his plans in a Stock Exchange statement issued after the market had closed. It came following pressure from the Takeover Panel after Canary Wharf shares rose 5 per cent to 265p yesterday in the wake of weekend speculation that the Canadian property guru might launch a bid.

A statement issued on his behalf said: "With the consent of the board of the company, Mr Reichmann is discussing his possible involvement with third party potential offerors. Mr Reichmann has indicated to the board that he may consider forming a consortium to make an offer for the company depending on the outcome of these discussions and the terms of any offers for the company."

The bidders Mr Reichmann could team up with are Goldman Sachs, Morgan Stanley and Brascan, a Canadian company which has built up a 9 per cent stake in Canary Wharf.

It is thought Mr Reichmann could offer up to 310p per share, which would value Canary Wharf at £1.8bn.

Lazards has set this Thursday as a "deadline" for initial expressions of interest though it is thought this is more of a milestone in the process rather than a formal cut-off date.

No formal offers have yet been received. However, a consortium which involved some of the world's most powerful investment banks together with the company's founder and chairman would be hard to beat. Mr Reichmann also holds a 7.7 per cent in the group.

Alan Patterson, a property analyst at HSBC, said Mr Reichmann was "trying to talk up the possibility of a bid. If an offer doesn't come in around 310p he might make one himself."

However, Jeremy Anagnos at Deutsche Bank, said he felt there was a risk that interested parties might pull out. "There's been no pick-up in demand at Canary Wharf," he said, referring to an increase in unlet space as a result of the downturn in investment banking.

Canary Wharf was originally developed by Reichmann's Olympia & York. It fell into difficulty in the early 1990s and had to be bailed out by a group of banks. In 1995 it was sold to a consortium led by Mr Reichmann and including the Saudi Prince Al Waleed bin Talal.

It floated on the stock market in 1998.