Reichmann secures financial backing for Canary Wharf bid

Paul Reichmann, the former executive chairman of Canary Wharf Group PLC, is expected to reveal this week that he has secured financial backing from HSBC Holdings PLC and Barclays PLC to fund a bid for the Docklands development company he founded, according to an unsourced report in the Sunday Telegraph. A spokesman for HSBC declined to comment on the report and no one at Barclays could immediately be reached for comment.

Any bid, which is not expected this side of Christmas, would have to top a 1.56 bln stg offer from a consortium led by Morgan Stanley. The consortium includes Simon Glick, a wealthy New York diamond magnate who already has a 14 pct stake in Canary Wharf.

A committee of independent directors at Canary Wharf has already recommended the Morgan Stanley and Glick consortium´s revised 265 pence-a-share bid. Under the new cash and shares bid, the consortium guaranteed to underwrite any shares in a new Aim-listed vehicle that are not taken up by existing shareholders.

Saudi prince Al-Waleed bin Talal, several hedge funds and George Soros, the legendary US financier, are understood to have had talks with Morgan Stanley about participating in the share underwriting scheme.

Reichmann has been in discussions with Barclays and HSBC for several weeks but has now agreed a business plan and the terms of the banks´ involvement, according to the report.

His bid is expected to be pitched at above 270 pence per share, valuing Canary Wharf at about 1.6 bln stg.

Related News