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LONDON-Shares in Canary Wharf rallied this morning on speculation of a takeover bid from the mastermind behind the original development in the 1980s.

Paul Reichmann, chairman of Canary Wharf, has been linked to a management buyout approach in the event that offers from other parties fail to come up to scratch. A company statement today said Reichmann had told the board he had not “formed any definitive intention” to form a consortium, but that he continued to “review his options”. In response shares rose 4% or 11p to 264p in early trading.

The latest speculation was fueled by a report in the Sunday Telegraph that Reichman would make a move if other offers for the group came in below a certain level, thought to be around £1.8 billion ($2.8 billion).

Canary Wharf has received a number of expressions of interest from potential bidders, including investment bank Morgan Stanley and Canadian property group Brascan. A deadline for offers has been set for this Thursday.

The company announced in June that it had been approached by a number of parties drawn to the company after its share price fell to 132p on the back of economic concerns and worries over occupancy levels.

Reichmann is thought to value the business at around 310p per share. He had been part of Olympia & York group which developed the site in the late 1980s. But the company collapsed in the last property crash and it took until 1995 before Reichmann was able to buy it back. By 1999 he was ready to float it on the London Stock Exchange with a value of £2.2 billion ($3.4 billion.)

The meteroic rise of the Docklands-based company continued when a year later Canary Wharf entered the FTSE 100 Index a year later. But it fell out of the top 100 after interim results showed vacancy rates had risen to 6.7% by the end of 2002.

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