Canary Wharf takes centre stage again as bids flow in

If there's one thing that really sparks a journalist's interest, it's someone insisting that the matter being discussed "is not a story". That's what one lawyer advising on the sale of Canary Wharf told me this week. I, however, disagree.
The tale of Canary Wharf, which dates back to the early 1980s, has all the elements of a John Grisham novel - except the murder. The story involves a very private property tycoon from Canada, a wealthy family from New York with interests in diamonds and real estate, some of the largest financial institutions in the world, a multimillion pound lawsuit, and a host of law firms getting in on what will probably be the biggest deal this year.
The company is up for sale and every man and his law firm have been taking an interest, which has led to a couple of interesting client wins for magic circle firms.
So, if that doesn't interest you, feel free to put this down. My guess, though, is that you think this is definitely a story.
Here's a quick rundown of the key players and their advisers.
First, there's Paul Reichmann, current chairman and founder of Canary Wharf - he's our 'very private' Canadian property tycoon. His history with Canary Wharf is long and eventful. It was Reichmann's property company, Olympia & York (O&Y), which received backing from four large Canadian banks to first develop the Docklands site. But, in 1992, O&Y went bust and the banks had to bail out Canary Wharf.
This was unfortunate, not only for O&Y, but also for Clifford Chance which, after a referral from O&Y's Canadian lawyers Davies Ward & Beck, was a key adviser on the deal. The banks brought a £610m lawsuit in relation to CC's advice on the deal - it eventually settled a number of years later for around £10m. Reichmann then bought Canary Wharf back off the banks in 1995, and floated it in 1999. Reichmann currently holds around 7 per cent in the company and has been considering his own bid.
Reichmann's adviser is Macfarlanes and the deal is something of a coup for the high quality, but small, firm. This is a great opportunity for Macfarlanes to prove it has the capacity to hold its own with the big boys.
The next player is a consortium made up of Morgan Stanley Real Estate Fund (MSREF), Goldman Sachs real estate fund, Whitehall, and Simon Glick, which has already announced its bid.
Slaughter and May must have been rather pleased to receive a call from MSREF asking it to advise on its joint bid for the ailing Canary Wharf.
Although the firm was decidedly reticent on the subject, it is thought that Slaughters has acted for the fund before. One source said that top Morgan Stanley investment banker Mark Warham, one of the financial advisers on the deal, was the man who got Slaughters in for the job.
Like many real estate funds MSREF has spread its work around. But a lot has previously been done by Clifford Chance, which on this job has its hands full acting for long-term client and landlord Canary Wharf.
But there must be some disappointment in the Jones Day Gouldens camp. Jones Day is one of MSREF's main US advisers, having acted for the mutual property fund on its inception. In fact, the US firm is advising on certain tax aspects of this current deal.
So, why did the London office not get a look-in on the deal? Gouldens has always laid claim to the strength of its corporate team - not to mention the fact that it has a significantly larger real estate team than Slaughters, which is able to carry out all that necessary due diligence.
Some partners say that this kind of deal is purely the domain of the magic circle - but then look at Macfarlanes. It's in there mixing it up with the big boys.
It's probably just that Gouldens doesn't have the capability in the corporate and finance department to handle the complex aspects of such a transaction. Never-theless, its business development missed a trick - even missing a look-in on property due diligence.
Joining MSREF and Whitehall is Glick - another 'private' character, hailing from New York where his family has interests in real estate and diamond businesses. Glick and Reich-mann last linked up on a deal in 1995, when Glick was part of a Reichmann-led consortium that bought Canary Wharf from the banks in 1995. Glick holds around 14.5 per cent of Canary Wharf.
Glick is being advised out of the London office of Weil Gotshal & Manges.
Linklaters has been advising its long-term client Whitehall.
The other player in the auction is the Canadian property development company Brascan - a name that has put a smile on the faces of partners at Freshfields Bruckhaus Deringer in recent weeks. It's the first time that the property giant, which has interests worldwide, has given Fresh-fields the nod. It holds approximately 9 per cent in Canary Wharf.
How the firm won the work is not known - Freshfields isn't talking. But Brascan's financial advisers are Deutsche and Merrill Lynch, so my money's on one of them flicking the work Freshfields' way. Brascan's principal adviser in Canada and the US is Canadian firm Torys.
So what happens now?
Well, one lawyer involved says Reichmann is set to throw his weight in behind the MSREF-Glick-Whitehall consortium - which could see Glick and Reichmann repeating their joint purchase of 1995.
It is thought that the company will announce a preferred bidder this week. But don't expect this to be the last chapter in the Canary Wharf saga. A party close to the deal says there iss another bidder waiting in the wings and he could make a move this week.
We'll keep you updated.

emma.vere-jones@thelawyer.com