SEC Division of Trading and Markets no-action letter: Songbird Acquisition Limited

April 22, 2004

Diane Kerr, Esq. Davis Polk & Wardwell 450 Lexington Avenue New York, NY 10017

Re: Songbird Acquisition Limited File No.: TP 04-45

Dear Ms. Kerr:

This is in response to your letter dated April 22, 2004. A copy of that letter is attached with this response. By including a copy of your correspondence, we avoid having to repeat or summarize the facts you presented. The defined terms in this letter have the same meaning as in your letter, unless otherwise noted.

On the basis of your representations and the facts presented, but without necessarily concurring in your analysis, the United States Securities and Exchange Commission (Commission) hereby grants an exemption from Rule 14e-5 under the Securities Exchange Act of 1934 (Exchange Act), particularly in light of the following facts:

The Offer is required to be conducted in accordance with the U.K. City Code on Takeovers and Mergers (City Code);

Canary Wharf Group plc (Canary Wharf), a public limited company incorporated under the laws of England and Wales, is a "foreign private issuer," as defined in Rule 3b-4(c) under the Exchange Act;

Any purchases of Ordinary Shares of Canary Wharf by (i) Songbird Acquisition Limited (Bidco), a limited liability company incorporated under the laws of England and Wales, (ii) Morgan Stanley & Co. Limited and N.M. Rothschild & Sons Limited (together, the "Advisors"), or (iii) other financial institutions or brokers, in each case acting as agents for Offeror (collectively, the Prospective Purchasers), will be subject to the City Code; and

The existence of the Memorandum of Understanding on Exchange of Information between the Commission and the United Kingdom Department of Trade and Industry in Matters Relating to Securities and the United States Commodity

Futures Trading Commission and the United Kingdom Department of Trade and Industry in Matters Relating to Futures, dated September 25, 1991.

The Commission grants this exemption from Rule 14e-5 under the Exchange Act to permit the Prospective Purchasers to purchase or arrange to purchase Ordinary Shares otherwise than pursuant to the Offer, subject to the following conditions:

No purchases or arrangements to purchase Ordinary Shares, otherwise than pursuant to the Offer, shall be made in the United States;

The Offer Document shall disclose prominently the possibility of purchases or arrangements to purchase Canary Wharf Shares by the Prospective Purchasers, otherwise than pursuant to the Tender Offer;

The Prospective Purchasers shall disclose in the United States information regarding purchases of Canary Wharf Shares, otherwise than pursuant to the Tender Offer, to the extent such information is made public in the United Kingdom pursuant to the City Code;

The Prospective Purchasers shall comply with any applicable rules of the United Kingdom Organizations including the City Code and the rules and regulations of the United Kingdom Listing Authority and the London Stock Exchange;

The Prospective Purchasers shall provide to the Division of Market Regulation (Division), upon request, a daily time-sequenced schedule of all purchases of Canary Wharf Shares made by any of them during the Offer, on a transaction-by-transaction basis, including:

size, broker (if any), time of execution, and price of purchase; and

if not executed on the London Stock Exchange, the exchange, quotation system, or other facility through which the purchase occurred;

Upon the request of the Division, the Prospective Purchasers shall transmit the information as specified in paragraphs (5)(a) and (5)(b) above to the Division at its offices in Washington, D.C. within 30 days of its request;

The Prospective Purchasers shall retain all documents and other information required to be maintained pursuant to this exemption for a period of not less than two years from the date of the termination of the Offer;

The Prospective Purchasers shall comply with any applicable rules of U.K. organizations, including the City Code, the Auction Rules, and the rules of the London Stock Exchange;

Representatives of the Prospective Purchasers shall be made available (in person at the offices of the Division in Washington, D.C. or by telephone) to respond to inquiries of the Division relating to their records; and

Except as otherwise exempted herein, the Prospective Purchasers shall comply with Rule 14e-5.

The foregoing exemption from Rule 14e-5 under the Exchange Act expressed above does not apply to purchases or arrangements to purchase Ordinary Shares prior to this exemption being granted, is based solely on your representations and the facts presented, and is strictly limited to the application of this rule to the proposed transactions. Such transactions should be discontinued, pending presentation of the facts for our consideration, in the event that any material change occurs with respect to any of those facts or representations.

In addition, we direct your attention to the anti-fraud and anti-manipulation provisions of the federal securities laws, including Sections 10(b) and 14(e) of the Exchange Act and Rule 10b-5 thereunder. The participants in the Offer must comply with these and any other applicable provisions of the federal securities laws. The Division of Market Regulation expresses no view with respect to any other questions that the proposed transactions may raise, including, but not limited to, the adequacy of disclosure concerning, and the applicability of any other federal or state laws to, the proposed transactions.

For the Commission, by the Division of Market Regulation pursuant to delegated authority,

James A. Brigagliano Assistant Director Division of Market Regulation

Incoming Letter:

The Incoming Letter is in Acrobat format.

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DAVIS PoLK & WARDWELL
450 LEXINGTON AVENUE I300ISTREETNW
WASHINGTON, D.C 20005
NEW YORK, N.Y. 10017
2 I2 450 4000 I 600 EL CAMINO REAL MENLO PARK, CA 94025 FAX 212 450 3800 99 GRESHAM STREET LONDON EC2V 7NG DIANE G. KERR 212 450 4529 15, AVENUE MATIGNON kerr@dpw.com 75008 PARIS Apnl 22, 2004 MESSETURM 60308 FRANKFURT AM MAIN 17-22, AKASAKA 2-CHOME MINATO-KU, TOKYO 107-005 Songbird Acquisition Limited 3A C HATER ROAD Re: Songbird Estates PLC HONG KONG Applicable Statutory Provision:
Securities Exchange Act of 1934 -- Rule 14e-5 Securities and Exchange Commission 450 5th Street, N.W. Washington, DC 20459 Attention: James Brigagliano Ladies and Gentlemen:
We are writing on a confidential basis on behalfof Songbird Acquisition Limited, a limited liability company incorporated under the laws ofEngland and Wales (“Bidco”). Bidco is awholly-owned subsidiary of Songbird Estates PLC, a public limited company also incorporated under the laws of England and Wales (“Holdco”). Bidco is the vehicle throughwhich a consortium (the “Consortium”) comprised ofreal estate private investment opportunity funds sponsored by the Morgan Stanley group, investment vehicles and trusts connected with Mr. Simon Glick and his family (the “Glick Entities”), real estate investment funds sponsored and managed by The Goldman Sachs Group, Inc. and its affiliates, Morgan Stanley sponsored discretionary private equity funds, a private equity fund managed by the Morgan Stanley group and a subsidiary ofBritish Land Company PLC is contemplating making the Tender Offer (describedbelow). Bidco and Holdco provided us with, and authorized usto make on their behalf, the factual representations set forth below. On December 5, 2003, the Consortium, through Silvestor UK Properties Limited, a limited liability company incorporated under the laws of England and Wales (and wholly-owned subsidiary of Silvestor Holdings plc, a public limited company also incorporated under the laws ofEngland and Wales), publicly announced a proposal forthe acquisition ofCanary WharfGroup plc, a public limited company incorporated under the laws ofEngland and Wales (“Canary Wharf’), to be implemented, in relevant part, through a scheme ofarrangement

Securities and Exchange Commission 2 April 22, 2004 under Section 425 ofthe United Kingdom Companies Act 1985. Documents regarding the scheme ofarrangement were posted to shareholders on January 15, 2004, as amended on February 9, 2004, and as further amended on April 7, 2004. On February 24, 2004, CWG Acquisition Limited, a private limited company incorporated under the laws ofEngland and Wales (“CWG Acquisition”) posted offer documents to Canary Wharf shareholders with the intention ofpurchasing the entire issued ordinary share capital in Canary Wharf (the “Competing Offer”). CWG Acquisition revised this offer on April 14, 2004. On Friday, April 16, the Consortium announcedpublicly that it had determined to revise the structure ofits offer to be a tender offer to purchase the entire issued ordinary share capital in Canary Wharf (the “Tender Offer”) (other than those Canary Wharf Shares currently held by or on behalfofthe Glick Entities, as defined and explained in more detail below). In accordance with customary practices in the United Kingdom, the Tender Offer is being made outside ofthe United States on behalf ofBidco by its financial advisors Morgan Stanley & Co. Limited and N.M. Rothschild & Sons Limited (the “Advisors”) acting solely as agent for Bidco. The Tender Offer is being made available to Canary Wharfshareholders in the United States by Bidco. As previously discussed with members ofthe staff(the “Staff’) ofthe Securities and Exchange Commission (the “Commission”), we are requesting exemptive relief from Rule 14e-5 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), for certain purchases ofCanary WharfShares made outside ofthe United States prior to and during the conduct of, but outside ofthe terms of, the Tender Offer.
I. Factual Background
A. The Canaiy Wharf Group
Canary Wharf and its subsidiaries control and manage a distinctive, integrated property development and investment project focused primarily on Grade A office space and high quality retail facilities at a 97 acre estate in close proximity to the City of London, England. The Canary Wharf group develops, manages and owns properties on the estate as well as undertaking the construction ofthe buildings and facilities on the estate. As at December 31, 2003, approximately 13.1 million square feet ofoffice and retail space has been constructed on the Canary Wharf estate (including approximately 4.2 million square feet in other ownership). The Canary Wharf group has approximately 1.0 million square feet of additional office and retail space currently under construction.

Securities and Exchange Commission 3 April 22, 2004 As ofJanuary 12, 2004, the share capital ofCanary Wharf consisted of 585,008,225 issued and fully paid Canary Wharfshares, with a par value ofone pence each (the “Canary WharfShares”). The Canary Wharf Shares are not listed on any stock exchange in the United States. The Canary Wharf Shares are currently listed on the official list ofthe United Kingdom Listing Authority and admitted to trading on the principal market ofthe London Stock Exchange. Canary Wharf is a foreign private issuer as defined in Rule 3b-4(c) ofthe Exchange Act, has no class ofsecurities registered under Section 12 ofthe Exchange Act, has perfected an exemption under Rule l2g3-2(b) promulgated under the Exchange Act, and is not and never has been subject to the periodic reporting requirements ofthe Exchange Act. We have been informed that based on information available as ofJanuary 12, 2004, Bidco estimates that approximately 37% ofoutstanding Canary Wharf Shares are held by or on behalfofbeneficial holders in the United States. B. Bidco, Holdco and the Consortium Bidco and Holdco are companies newly incorporated in England and Walesfor the purpose ofthe acquisition. Neither Bidco nor Holdco has carried on any prior business, save for entering into transactions relating to the acquisition. Other than pursuant to the contractual arrangements described elsewhere in this letter, neither Bidco nor Holdco currently has any interest in Canary WharfShares. Following successful completion ofthe acquisition, Holdco will be owned by the members ofthe Consortium (who are described above), and the new holders ofBidco shares acquired pursuant to the Tender Offer. The members ofthe Consortium have entered into a shareholders agreement which regulates the management and control ofHoldco.
II. Proposed Structure oftheTender Offer
The following description ofthe Tender Offer is based upon discussions with Slaughter and May, English counsel for Bidco and Holdco. The Tender Offer will be made in cash and will be structured as a single offer made concurrently in the United Kingdom and in the United States, as well as in otherjurisdictions where such offer may legally be made. The Tender Offer will include the possibility forshareholders to elect that all or part ofthe consideration they receive for tendering theirCanary Wharf Shares will be in the form ofshares in Bidco, which share alternative will not be made available to U.S. persons. The Tender Offer will be structured to comply with the applicable provisions ofthe City Code on Takeovers and Mergers ofthe United Kingdom (the “City Code”) and the rules and procedures established by the U.K. Panel on

Securities and Exchange Commission 4 April 22, 2004 Takeovers and Mergers(the “Takeover Panel”), which administers the City Code, for purposes ofan auction procedure forthe competing offers for Canary Wharf Shares by the Consortium and CWG Acquisition (such rules and procedures, the “Auction Rules”). In addition, except as otherwise requested herein, the Tender Offer will be structured to comply with Section 14(e) ofthe Exchange Act and the rules and regulations promulgated thereunder. The Tender Offeris not subject to Section 14(d) ofthe Exchange Act orRegulation 14D thereunder since no class ofsecurities ofCanary Wharfis registered under
Section 12 ofthe Exchange Act.
Under the Auction Rules, public announcement ofthe Tender Offer was required to be made, and was made, in the United Kingdom and the United States on April 16, 2004. The Tender Offer will be made pursuant to this public announcement and pursuant to an offer document (collectively, the “Offer Document”), which will comply with the rules and regulations ofthe City Code and the requirements ofthe Auction Rules. Pursuant to the Auction Rules, the Offer Document must be mailed to all holders ofCanary WharfShares within 7 days ofthe announcement, which would be on or before April 23, 2004. Pursuant to the Auction Rules, neither the Tender Offer northe Competing Offer is capable ofbeing, and may not be, increased orotherwise materially revised. To comply with the City Code, an offer must lapse unless it becomes or is declared unconditional as to acceptances. Under the Auction Rules, ifmore than 50% ofCanary Wharf shareholders (as calculated in accordance with the City Code and the Auction Rules) have tendered in response to either Bidco ‘s Tender Offer orthe Competing Offer, the winning offermay become orbe declared unconditional as to acceptances. The Auction Rules provide that the latest date by which an offer maybecome unconditional as to acceptances will be 14 calendar days afterposting the Offer Document orsuch later date as may be required to comply with Section 14(e) of the Exchange Act. To accommodate the requirements ofthe Exchange Act, the Tender Offer will remain open for an initial period ofnot less than 20 U.S. business days and for such additional period or periods as maybe determined by Bidco or as may be mandated by the provisions ofRegulation 14E, the Code or the Auction Rules. Shareholders will be able to withdraw acceptances from the Tender Offer in the event that the Competing Offer becomes oris declared unconditional as to acceptances, in order to enable such shareholders to participate in the Competing Offer. Once the Tender Offer becomes or has been declared wholly unconditional (e.g., all conditions to the Tender Offer have been satisfied or, where possible, waived), which, pursuant to Rule 31.7 ofthe City Code, must be no later than 21 calendar days afterthe date the Tender Offer has become or has been declared unconditional asto acceptances or the first closing date (whichever is the later) unless the Takeover Panel agrees to a later date, Bidco must accept all

Securities and Exchange Commission 5 April 22, 2004 Canary WharfShares that are validly tendered and not withdrawn during the initial offer period, and must, pursuant to Rule 31.8 ofthe City Code, pay for such accepted shares within 14 calendar days. Ifthe Tender Offer becomes oris declared unconditional as to acceptances, the Tender Offer must, in order to comply with Rule 31.4 ofthe City Code, remain open for acceptances for at least 14 calendar days following the date on which it would otherwise have expired and may remain open for such longer period as Bidco deems appropriate. An institution in the U.K. will act as the U.K. receiving agent to receive tenders ofCanary Wharf Shares pursuant to the Tender Offer. A depositary operating in the United States will act as the agent to receive tenders ofCanary Wharf Shares pursuant to the Tender Offer. The Tender Offer will be subject to a number ofconditions which are generally customary for U.K. offers ofthis type.
III. Purchases Outside the Tender Offer and Rule 14e-5
In the United Kingdom, purchases outside a tender offer are permitted, subject to certain limitations, and we have been informed that such purchases are quite common in connection with U.K. tender offers. Under Rules 6.1 and 6.2 of the City Code, Bidco, acting directly and through its Advisors, would be permitted to purchase Canary Wharf Sharesin the open market or otherwise prior to and during the conduct of, but outside the terms of, the Tender Offer,subject to certain limitations including as to price. The Auction Rules, however, provide that neither bidder, nor any person acting in concert with it, may acquire any Canary WharfShares or warrants (or any rights to acquire such shares or warrants) without consent ofthe Takeover Panel, during the period from the announcement ofthe revised offers (April 16, 2004) until the end ofthe offer period, on better terms than those made available under theirrespective offers. Subject to certain exceptions, Rule 14e-5 prohibits a “covered person” to, directly or indirectly, purchase or arrange to purchase any equity securities in the target company or any securities immediately convertible into, exchangeable for or exercisable for equity securities in the target company, except as part ofthe tender offer. This prohibition applies from the time ofpublic announcement of the tender offer until the tender offer expires. “Covered person” is defined as (a) the offeror and its affiliates; (b) the offeror’s dealer-manager and its affiliates; (c) any advisor to any ofthe foregoing, whose compensation is dependent on the completion ofthe offer; and (d) any person acting, directly orindirectly, in concert with any ofthe persons specified above. Purchases by Bidco and other covered persons acting in concert with Bidco, including the Advisors, ofCanary WharfShares outside the Tender Offer would not fall within any ofthe excepted activities specifically outlined in Rule

Securities and Exchange Commission 6 April 22, 2004 14e-5. Accordingly, in the absence of exemptive relief, such purchases would be prohibited after the Tender Offer is announced. The Auction Rules provideprotections similar to those provided by Rule 14e-5, making, we believe, exemptive relief appropriate in the circumstances of the Tender Offer, by requiring that Bidco and such persons may not acquire Canary WharfShares or warrants (or any rights to acquire such shares or warrants), without consent ofthe Takeover Panel, on better terms than those made available under the Tender Offer. In addition, under Rule 8 ofthe City Code any purchases outside the Tender Offer are required to be disclosed on a next-day basis to the London Stock Exchange and the Takeover Panel and are available for public inspection at the Company Announcements Office ofthe London Stock Exchange, as well as on the web site ofthe London Stock Exchange. Disclosures ofthese purchases attract significant public attention by their very nature and they are disseminated on dealer’s screens throughout the London market. Any information about such purchases will be announced in the United States by way ofan announcement by or on behalf ofBidco. The public announcement ofthe Offer contained, and the formal offer, when posted, will contain, a statement that, subject to obtaining the relief requested in this letter, Bidco (or persons acting in concert with Bidco for purposes ofthe Offer) or its ortheir nominees orbrokers (acting as agents) may make certain purchases of, or arrangements to purchase CanaryWharfShares outside ofthe United States during the period in which the Tender Offerremains open for acceptances, but outside the terms ofthe Tender Offer. The Offer Document will further state that in accordance with the requirements ofRule 1 4e￾5 and with any exemptive reliefthat may be granted by the Staff, such purchases, or arrangements to purchase, must comply with applicable U.K. rules, including the CityCode, the Auction Rules and the rules ofthe London Stock Exchange. Although there are, in our view, serious doubts asto whetherthe jurisdictional predicate for the application ofthe Exchange Act — namely that there be a purchase of a security “by the use ofany means or instrumentality of interstate commerce, or ofthe mails, or ofany facility ofany national securities exchange” — would be satisfied ifBidco, the Advisors, or financial institutions acting on its or their behalfmade purchases ofCanary Wharf Shares outside the United States, we nonetheless apply, on behalfofsuch persons, for exemptive relieffor such purchases from the provisions ofRule 1 4e-5 pursuant to Rule 1 4e￾5(d), as set forth below. We have been requested by Bidco and the Consortium to emphasize that this letter does not reflect an admission that Rule 14e-5 would apply to such purchases ofCanary WharfShares outside the United States in the absence ofsuch exemptive relief.

Securities and Exchange Commission 7 April 22, 2004
IV. Requested Exemptive Relief
Based on the foregoing, we respectfully request on behalf ofBidco and the Consortium that Bidco, the persons acting in concert with Bidco for purposes of the Offer, the Advisors, and any broker or other financial institution acting as its or their agent (collectively, the “Prospective Purchasers”) be granted exemptive reliefforthe Tender Offer from the provisions ofRule 14e-5, in order to permit purchases ofCanary Wharf Shares outside the Tender Offer by any ofthe Prospective Purchasers that would otherwise be prohibited by Rule 14e-5, subject to the following conditions:
(a) no purchases or arrangements to purchase Canary WharfShares, otherwise than pursuant to the Tender Offer, will be made in the United States; (b) disclosure ofthe possibility ofpurchases or arrangements to purchase Canary WharfShares by the Prospective Purchasers, otherwise than pursuant to the Tender Offer, will be prominently included in the Offer Document; (c) the Prospective Purchasers shall disclose in the United States information regarding purchases ofCanary Wharf Shares by the Prospective Purchasers, otherwise than pursuant to the Tender Offer, to the extent such information is made public in the United Kingdom in accordance with the City Code; (d) the Prospective Purchasers shall provide to the Division ofMarket Regulation ofthe Securities and Exchange Commission (the “Division of Market Regulation”) upon request, a daily time-sequenced schedule ofall purchases of Canary WharfShares by the Prospective Purchasers, otherwise than pursuant to the Tender Offer, on a transaction by transaction basis, including (1) size, broker (if any), time ofexecution, and price ofpurchase, and (2) if not executed on the London Stock Exchange, the exchange, quotation system or other facility through which the purchase occurred; (e) upon request ofthe Division ofMarket Regulation, the Prospective Purchasers shall transmit the information specified above under (d)(1) and (d)(2) to the Division ofMarket Regulation at its offices in Washington, D.C., within 30 days ofits request; (f) the Prospective Purchasersshall comply with any applicable rules ofU.K. organizations, including the City Code, the Auction Rules, and the rules ofthe London Stock Exchange;

Securities and Exchange Commission 8 April 22, 2004 (g) the Prospective Purchasers shall retain all documents and other information required to be maintained pursuant to this exemption for a period of not less than two years form the date ofthe termination ofthe Tender Offer; (h) the representatives ofthe Prospective Purchasers shall be made available (in person at the offices ofthe Division ofMarket Regulation in Washington, D.C., or by telephone) to respond to inquiries ofthe Division of Market Regulation relating to such records; and (i) except as otherwise exempted herein, the Prospective Purchasers shall comply with Rule l4e-5. The Commission has granted a number ofexemptions from Rule 1 4e-5 and Rule lOb-13 (the predecessor ofRule 14e-5) to permit purchases by offerors and persons acting on behalfofofferors. We believe the exemptive relief requested herein under Rule 1 4e-5 is consistent with that granted by the Commission in similar situations in the past such as letter regarding the offer by St. David Capital plc for Hyder plc (available April 17, 2000), letter regarding the offer by Schlumberger Limited for Sema Group plc (available February 15, 2001), letter regarding the offer by Vinci for TBI plc (available August 23, 2001), letter regarding the offer by RWE Aktiengesellschaft for Innogy Holdings plc (available March 22, 2002), letter regarding the offer by CIBER (UK) Limited for ECsoft Group plc (available January 8, 2003) and letter regarding the offer by Celltech Group plc for Oxford GlycoSciences plc (available March 3, 2003). In addition, we note the existence ofthe Memorandum ofUnderstanding on Exchange ofInformation between the Commission and the United Kingdom Department ofTrade and Industry in Matters Relating to Securities and the United States Commodity Futures Trading Commission and the United Kingdom Department of Trade and Industry in Matters Relating to Futures dated September 25, 1991. In view ofthe expedited timetable for the Auction, we respectfully request that the Staffrespond to the request made in this letter as soon as possible. If you have any questions or require any additional information, please contact John J. McCarthy at (212) 450-4334 or at +44 20 7418 1399, Diane Kerr at (212) 450- 4529 or Michael Davis at +44 20 7418 1394. We respectfully request that you contact either ofthe foregoing persons prior to issuing a written response to the no-action positions requested herein. Pursuant to Regulation 200.81, we respectfully request on behalf ofBidco that this request and the response be accorded confidential treatment until 120 days afterthe date ofthe response to such request orsuch earlier date as the Staff is advised that all ofthe information in this letter has been made public. This request for confidential treatment is made on behalf ofBidco forthe reason that certain ofthe facts set forth in this letter have not been made public.

Securities and Exchange Commission 9 April 22, 2004 In accordance with Release No. 33-6269, we enclose herewith seven conformed copies ofthis letter. Sincerely yours, /•i ‘~ /~~_-~__ ~- John J. McCarthy Diane Kerr Eline van der Vlist Michael Davis cc: PadraigCronin Matthew Bowden (Slaughter and May) Paul Vosper (Morgan Stanley) S. Wade Angus (Weil, Gotshal & Manges)