Canary Wharf has announced that its founder and former Executive Chairman, Paul Reichmann, has agreed to step down from the board as long as the company is in the midst of a takeover battle. Reichmann is currently attempting to derail a £1.56bn recommended takeover by a consortium led by Morgan Stanley and featuring Goldman Sachs and Canary Wharf’s largest shareholder, Simon Glick.
In a document issued today detailing the proposed Morgan Stanley offer, Canary Wharf said: “Paul Reichmann… has informed the board of the company that from the time of publication of this document he will not act as a director or participate in that capacity in the affairs of the company until the offer process is finally concluded.”
Relations between Reichmann and the rest of the Canary Wharf board soured in late December after he reneged on an earlier agreement to approve the sale of two buildings at the Docklands complex to Royal Bank of Scotland.
The disposal of 5 Canada Square and 25 Canada Square to RBS was approved at an extraordinary general meeting on 22 December and subsequently approved. The sale of the two buildings is conditional on the Morgan Stanley takeover going ahead.
However, it is understood that Canary Wharf considered Reichmann’s position on the board untenable while the bidding process was still ongoing.
Earlier today, Reichmann and his bidding partner, the Brascan Corporation, owner of a 9% stake in Canary Wharf, were given a Takeover Panel deadline of 13 February to bid for the company.