Reichmann plans £1.8bn bid to buy back Canary Wharf again

Paul Reichmann is planning an audacious bid for Canary Wharf, the property company he brought to the London stock market five years ago.

It is understood that the 72-year-old Canadian property tycoon, who is executive chairman, is working on a £1.8bn offer for the company that has developed a hugely successful complex of flagship office developments in London's Docklands.

Bids are due in by Thursday as part of a process being overseen by the investment bank Lazards.

This followed an announced by Canary Wharf in June that it had received expressions of interest from a number of potential bidders.

If Mr Reichmann succeeds it would be the second time the secretive property specialist has bought back the company he started.

He first started developing the Canary Wharf complex in the 1980s but it collapsed into receivership in 1995. He then bought it back for £800m before floating it on the stock market in 1998.

Other likely bidders include Brascan, a Canadian property company with a 9 per cent stake in Canary Wharf, the Whitehall Fund, an investment vehicle of Goldman Sachs, and Morgan Stanley, a rival investment bank that is interested via its Real Estate Fund.

There is also speculation about a possible bid from the Glick family, who have interests in the diamond industry and New York property.

It is not clear if Mr Reichmann will bid alone or team up with some of the other bidders. It is thought he is principally bidding himself if offers fall below 310p per share, and he still has a 7.7 per cent stake in the company.

It is also uncertain whether or not Mr Reichmann will meet the Thursday deadline, which is believed to have been introduced as a guideline rather than a make-or-break date. Mr Reichmann may choose to see what other offers emerge before showing his hand.

The Canary Wharf board is relying heavily on its independent directors for guidance during the process.

These are led by Sir Martin Jacomb, the former head of the Prudential. Mr Reichmann has written to Sir Martin to inform him of his plans.

The Canary Wharf developments have transformed London's skyline with the original Canary Wharf tower being joined more recently by head offices for HSBC and Citigroup.

Other new skyscrapers currently being built in the complex include offices for Barclays bank and the law firm Clifford Chance.

The success of the development, with its swanky purpose-built offices, has lured many other financial-services operations away from the City of London. Other big banks in the area include Morgan Stanley and Credit Suisse First Boston, as well as other high-profile tenants such as the Financial Services Authority and Ogilvy & Mather, the WPP-owned advertising agency.

The completion of the Jubilee Line Underground extension helped improve transport links while the Docklands Light Railway service has also been upgraded.

However, occupancy levels have been hit by the downturn in the investment banking sector and Canary Wharf shares hit a low of 132.5p in April.

Bid speculation started soon after, with a formal statement made in early June.

Yesterday the company declined to comment on Mr Reichmann's plans. "We are not commenting on any of the potential bidders."