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Brascan may thwart Canary Wharf takeover

Rachel Stevenson
Sunday 30 May 2004 19:00 EDT
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The ongoing saga for control of Canary Wharf has taken yet another twist after it emerged that Brascan, the Canadian conglomerate, has bought more shares in the company in an attempt to scupper Morgan Stanley's takeover of the group.

Brascan is now understood to hold more than 16 per cent of Canary Wharf after buying up another 4 per cent of the company last week. Together with the 9 per cent owned by Paul Reichmann, the founder and former chairman of Canary Wharf who resigned from the board last week, the rebel shareholders may be able to derail the takeover and thwart Morgan Stanley's ambitions for the business.

After a year-long battle for the property company, Morgan Stanley emerged as the victorious bidder with a 61 per cent controlling stake in the business. But it is thought that without a 75 per cent stake, Morgan Stanley could find that management actions, such as refinancing the company, could be blocked by Brascan and Mr Reichmann.

Morgan Stanley said that there are no obstacles to its business plans and that cash on the balance sheet can help refinance the business.

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