A formal bid for Canary Wharf Group PLC by a consortium led by US investment bank Morgan Stanley could emerge by the end of this week, according to sources close to the negotiations. Yesterday, the independent directors of Canary Wharf said it was working 'exclusively' with Morgan Stanley in an effort to get an agreed offer on the table.
Morgan Stanley, which is working with 14.5 pct private shareholder Simon Glick, has indicated that it will offer 220 pence a share in cash, plus equity valued at 35 pence in the new parent company of Canary Wharf.
It is not yet clear whether Goldman Sachs will join the Morgan Stanley consortium and support the bid. 'Goldman´s role in the consortium has yet to be resolved,' the source added.
'There are still a few regulatory hoops to go through, but we´re almost there. A formal offer from the Morgan Stanley consortium could be tabled by the end of this week,' the source told AFX News.
This news will put pressure on Paul Reichmann, Canary Wharf´s chairman, and Canadian group Brascan to decide their next moves in the long-running takeover saga. Reichmann, who owns 7.75 pct, is thought to be considering launching his own offer for the company he bought back from the developers in 1995 or team up with Brascan, which has a 9.0 pct stake.
The exclusivity agreement with Morgan Stanley precludes the independent committee of Canary Wharf -- set up in June to oversee the bidding process -- from soliciting any other offers, although it does not prevent Reichmann or Brascan from making a competing offer. Recent reports have suggested that Reichmann would make his own bid for the company if offers for the company failed to reach 310 pence a share.
'The bid process has been running for five months and all parties have had plenty of time to consider what they want to do. Now is the time bring the situation to an orderly close,' the source continued.