Property firm Capco buys HK tycoon's stake in London rival Shaftesbury

London

BRITISH property manager Capital & Counties Properties (Capco) has agreed to buy a 26.3 per cent stake in London rival Shaftesbury from Hong Kong tycoon Samuel Tak Lee's for £436 million (S$761 million).

Both Capco and Shaftesbury own large parts of the real estate in London's West End central area. Capco is acquiring the stake from Veloqx, a trust fund set up by Tak Lee, for 540 pence per share, a discount of 13.9 per cent to Shaftesbury's closing share price last Friday.

Major British property deals have all but come to a standstill as the coronavirus outbreak has led to retailers and other business halting rental payments, and cast doubt on both current and future valuations of buildings and portfolios.

Capco shares rose 2.8 per cent to 168 pence in early trade on Monday, while Shaftesbury, which rose as much as 3 per cent last Friday, fell 0.5 per cent after the deal was announced.

Capco said the deal, which is expected to be completed in two tranches, would be fully funded through its shopping and entertainment estate Covent Garden's revolving credit facility of £705 million.

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"We consider the acquisition a shrewd move, utilising a strong balance sheet to capitalise on an attractive valuation," Liberum analysts said in a note.

In order to deploy cash towards the deal, Capco will not complete the share buy-back of £100 million to shareholders, the FTSE-250 listed company said.

Separately, Shaftesbury said that Tak Lee has withdrawn all legal proceedings against it over allegations and claims related to a 2017 share placement conducted by the company. REUTERS