Brascan, the Canadian property and resources group, will use its 9 pct stake to block any rival bid for Canary Wharf PLC that it believes undervalues the Docklands development company, The Sunday Telegraph reported citing bankers close to the bidding process.
The newspaper said the tactic may force Morgan Stanley and Goldman Sachs, the US investment banks that are preparing a rival bid to take Canary Wharf private, to include Brascan in their deal or leave the field clear for a Brascan offer.
Bankers say that Brascan wants to form an alliance with another shareholder or acquire sufficient additional stock to take its Canary Wharf holding to over 10 pct.
At that level, it would be able to exploit takeover rules preventing any other bidder from acquiring 100 pct of Canary Wharf through compulsory purchases, the newspaper said. Morgan and Goldman may not be able to finance their offer unless they have the certainty of winning 100 pct of Canary Wharf, the article added.