The Brascan Corporation, which controls a 9% stake in Canary Wharf, has confirmed that it plans to block Morgan Stanleyââ¬â¢s bid for the Docklands developer. Canary Wharf said last week that it was entering into exclusive talks with the Morgan Stanley consortium. However, Bruce Flatt, Chief Executive of Brascan, said last week that his company would reject any offer by the Morgan Stanley consortium under the terms proposed last week.
Canary Wharf Chairman, Paul Reichmann, has also been linked with a possible bid and may use his 7% stake to block Morgan Stanleyââ¬â¢s offer. It is believed that Morgan Stanley would be unlikely to proceed with a takeover without the backing of two major shareholders.
The Morgan Stanley consortium also includes Simon Glick, who owns a 14% stake in Canary Wharf. Its bid values the company at 255p per share, but the offer is split between 220p per share in cash and 35p per share equity in the bid vehicle, which will be listed on the Alternative Investment Market.
Speaking at the a conference to discuss Brascanââ¬â¢s third-quarter results, Flatt said: ââ¬ÅThe offering of this stub equity in an illiquid vehicle, which probably has no possibility of proper trading potential and no potential of ever trading anywhere near the purported intrinsic value, we think is wrong for Canary Wharf shareholders. We will vote our shares against their offer if it does come out.ââ¬Â
