UK property firms Capco, Shaftesbury in talks on reported £3.5b merger

BRITISH real estate firms Capital & Counties Properties (Capco) and Shaftesbury said they were in advanced talks on a merger that would bring such London tourist destinations as Covent Garden and Soho under one umbrella.

Shaftesbury would own 53 per cent and Capco shareholders the remainder in a deal structured as an acquisition of Shaftesbury by Capco, the companies said in a statement on Saturday (May 7).

They did not give a value for the deal. Sky News reported the merged businesses would have a valuation of £3.5 billion (S$6 billion).

The companies said the merger would create a real estate investment trust (Reit) focused on London’s West End with a portfolio of some 2.9 million sq ft (270,000 sq m) “in high-profile destinations including Covent Garden, Carnaby, Chinatown and Soho”.

Norway’s sovereign wealth fund, a shareholder in both firms, signalled its support for the merger, they said.

The potential deal comes as London has started to pick up from pandemic lows and travellers get back on planes with easing of Covid-19 quarantine rules after nearly 2 years.

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When major British property deals were at a standstill in early months of the pandemic in 2020, Capco bought a 26.3 per cent stake in London rival Shaftesbury from Hong Kong tycoon Samuel Tak Lee for £436 million.

The trust would be led by Capco boss Ian Hawksworth and chaired by Jonathan Nicholls, chair of Shaftesbury, the companies said. Brian Bickell, who has been CEO of Shaftesbury for 11 years, would retire on completion of the merger.

Evercore and Blackdown Partners are advising the Shaftesbury board, and Rothschild & Co is advising Capco, the statement said. REUTERS