Canary Wharf has backtracked on yesterdayââ¬â¢s denial and confirmed that Chairman, Paul Reichmann, is considering a management buyout of the company.
In a statement made late last night at the request of the Takeover Panel, Canary Wharf said: ââ¬ÅWith the consent of the board of the company, Mr Reichmann is discussing his possible involvement with third party potential offers. Mr Reichmann has indicated to the board that he may consider forming a consortium to make an offer for the company depending on the outcome of these discussions and the terms of any offers for the company.ââ¬Â
Earlier in the day, the company had issued a statement saying that Reichmann had ââ¬Ånot formed any definitive intentionââ¬Â to bid for the company, and that he continued ââ¬Åto review his optionsââ¬Â.
If he does proceed with a bid, Reichmann will be in direct competition with Morgan Stanley, which has already confirmed it intends to make an offer. Goldman Sachââ¬â¢s Whitehall property fund and the Canada-based Brascan Corporation are also thought to be considering bids.
However, unless Canary Wharfââ¬â¢s independent directors receive a bid they can recommend to shareholders, the company will proceed with a reconstruction plan. According to sources close to the company, options under consideration include the sale of some parts of the estate, repayment of some debt and a possible demerger of Canary Wharfââ¬â¢s development business.
Some analysts have said that a break-up of the company could be difficult because of the cost of restructuring. They also said that Canary Wharf could face problems with disposals because many of its most prominent properties are securitised. However, others said that the securitisation agreements were flexible enough to make disposals possible.
