Ritblat makes last-minute move to muscle in on Canary battle

Veteran property tycoon John Ritblat is attempting to muscle his way back into the eight-month bidding battle for Canary Wharf, the company that owns the London Docklands estate.

The chairman of British Land is understood to have approached the US investment bank Morgan Stanley about providing up to £250m towards its bid for the company.

On Thursday Morgan Stanley upped its offer for Canary Wharf to 275p a share, valuing the company at £1.61bn. Mr Ritblat is interested in getting his hands on Canary Wharf's 500,000 square feet of retail properties, which is let to some of the biggest names on the high street including Boots, Next, Waitrose, Gap and Tesco. He is understood to have made the offer to buy the retail estate days after Morgan Stanley moved ahead of rival bidder Brascan for Canary Wharf.

Neither party would comment, but well-placed sources said that Morgan Stanley was seriously considering the offer. If it wins the bid for Canary Wharf then Morgan Stanley is planning to sell off the buildings quickly and return cash to shareholders. Mr Ritblat's offer for the shops would aid that process.

Brascan, on the other hand, wants to hold Canary Wharf as a long-term investment. Sources close to the Canadian investor said it may invest for up to 10 years to see Canary Wharf through its next phase of property development.

Mr Ritblat's offer is his second stab at buying Canary Wharf's retail properties. Earlier this year he held talks with Paul Reichmann, Canary Wharf's founder and former chairman, about a similar deal. But talks broke down over how the deal was structured. Mr Reichmann was himself in the bidding race for Canary wharf, but on Friday he announced his withdrawal.

Mr Reichmann is now backing Brascan's bid for the company. Together they own 17.9 per cent of Canary Wharf's shares. He has vowed to vote against Morgan Stanley.

The investment bank's offer is backed by wealthy investor Simon Glick, who controls 14.5 per cent of Canary Wharf.

Many shareholders believe Brascan will this week trump Morgan Stanley's bid and table £280p a share. In anticipation, Canary Wharf gained 1.25p on Friday to close at 278p, 3p a share above Morgan Stanley's offer.

Comments