Capco, Shaftesbury agree £5bn merger

Capco, Shaftesbury agree £5bn merger

The boards of Capital & Counties Properties PLC (Capco) and Shaftesbury PLC have reached agreement on the terms of a recommended all-share merger to form the combined group.

As a result of the merger, Shaftesbury shareholders will own 53% of the combined group and Capco shareholders will own 47% of the combined group.

It is intended that the combined group will be called Shaftesbury Capital PLC on completion.

”The merger will bring together two respected real estate companies, located in some of the most iconic parts of London’s West End, to create a leading mixed-use central London REIT, with the combined group’s portfolio valued at approximately £5 billion, Annualised Gross Income of approximately £165.5 million and an estimated rental value (ERV) of approximately £218.0 million as at 31 March 2022,” said the companies in a joint statement.

The combined group’s portfolio will comprise approximately 670 predominantly freehold buildings with approximately 2.9 million square feet of lettable space across approximately 2,000 commercial and residential units (excluding the Longmartin Joint Venture and Lillie Square Joint Venture).

At 31 March 2022, the combined group’s portfolio comprised:

– retail: 35% (approximately £1.7 billion) of the portfolio value;

– hospitality and leisure: 34% (approximately £1.7 billion) of the portfolio value; and

– offices and residential: 31% (approximately £1.6 billion) of the portfolio value (split as 14% residential and 17% offices).

The combined group’s portfolio is located in a number of vibrant, high-profile and high-footfall destinations across London’s West End, including Covent Garden, Carnaby, Chinatown and Soho, close to its major cultural and entertainment attractions, employment locations and transport hubs.

Henry Staunton, Chairman of Capco, said: “As the retiring Chairman of Capco, I am delighted by the prospects offered by the proposed merger with Shaftesbury to shareholders as London’s West End continues its recovery. I have every confidence in the ability of the combined management and Board of Shaftesbury Capital to deliver sustainable value growth for shareholders and benefits for broader stakeholders from its unique portfolio of properties.”

Jonathan Nicholls, Chairman of Shaftesbury, said: “The merger of Shaftesbury and Capco unites two complementary and adjacent real estate portfolios under single ownership. Shaftesbury Capital will own a first-class portfolio in some of the most iconic destinations across London’s vibrant West End. The experienced leadership team, with their impressive track record of innovation and curation, should ensure a sustainable and prosperous future for our destinations, the communities they serve and our wider stakeholders. With cost and operational synergies, a strong corporate governance framework, increased scale and greater equity market liquidity, the combination also provides a firm foundation for future value creation for our shareholders.

On behalf of the Shaftesbury Board, I would like to thank Brian Bickell, Simon Quayle and Tom Welton for their truly extraordinary commitment to Shaftesbury over many decades. Their contribution to its success has been beyond measure and they will be leaving the business in a strong position for their successors.”