Canary Wharf Group plc is planning legal action against its famous founder, Paul Reichmann, following his decision to bid against the Docklands property group in a competition for a £ 2 billion development, The Sunday Telegraph reported, citing a senior company official.
Reichmann´s attempt to develop Wood Wharf, which is very close to Canary Wharf, has outraged the company´s board as he is still being paid a 500,000 stg salary by the group, the newspaper said.
'The board has considered this issue and will do so again. Legally he is not allowed to do this. He is still a director of the company and an employee,' one senior company official is reported as saying.
In November, Reichmann stood down as executive chairman of Canary Wharf. However, he continued to receive a substantial salary even though he is taking no part in the management of the company.
After several months of trying to mount his own bid for Canary Wharf, Reichmann eventually threw in his lot with Brascan, a Canadian property and power conglomerate, which last week offered 275 pence in cash with an additional shares element that it says could lift the value of the offer to 348 pence.
However, most analysts expect a rival offer at 295 pence from funds advised by Morgan Stanley to win the day. They point out that under the terms of the Brascan offer, only 19 pct of shareholders could get the 348 pence.
Source: Freeman / AFX