City giants set to back Reichmann bid

CANARY Wharf founder Paul Reichmann has drawn up a list of potential backers ready for a pre-Christmas takeover move on the Docklands developer.

Backers for two rival Wharf suitors - including Citigroup and Goldman Sachs - are considering joining the Reichmann camp as the 73-year-old steps up his campaign to win shareholder support.

A source close to the bidding said: 'Christmas is not a bad thing to aim for from Reichmann's perspective - it will take that long to get people signed up and shareholder agreements in place.'

Citigroup is committed to supporting a £1.5bn cash and shares bid from a Morgan Stanley-fronted consortium which failed two weeks ago to win board recommendation after five months of talks.

Sources say the giant US bank has contacted Reichmann on several occasions about joining his team.

Meanwhile Brascan, with a 9% Canary stake, reckons it has about 20% shareholder support for its £1.5bn cash offer, despite also being rejected two weeks ago.

Reichmann, a 7.75% shareholder, stepped down as chairman two weeks ago to pursue his own bid and has Lehman Brothers as his debt provider.

According to one source, this does not stop Citigroup having conversations with him on the lines of 'in the event we will be there for you'.

Goldman Sachs is understood to have committed £50m to the Morgan consortium, which includes 14.5% shareholder Simon Glick.

'It should not be a surprise if Goldman have talked to Reichmann early about making a flip,' said one deal source.

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