UK-based property firms Shaftesbury Plc and Capital & Counties Properties Plc (Capco) are in advanced discussions regarding a possible all-share merger of the two companies.
According to a joint statement on Saturday, the possible merger would create a REIT focused on the West End of London with a portfolio of c.2.9 million square feet of lettable space located in high-profile destinations including Covent Garden, Carnaby, Chinatown and Soho.
The combined ownership would comprise c.1.8 million square feet of retail and hospitality space, together with office and residential accommodation of c.1.1 million square feet.
Under the proposed terms of the possible merger, Shaftesbury shareholders, excluding the Shaftesbury shareholding owned by Capco, will own 53% of the combined company, and Capco shareholders will own 47% of the combined company.
The deal could be agreed in the next few weeks and the merged businesses would have a combined valuation of around £3.5bn, The Financial Times reported, citing people familiar with the discussions.
The combined company will be led by Jonathan Nicholls as chairman and Ian Hawksworth as CEO, the companies said. Situl Jobanputra will be the CFO and Chris Ward will be the COO.
After 36 years at Shaftesbury, including 11 years as CEO, Brian Bickell will retire on completion of the transaction.
Norges Bank, a major shareholder in both Shaftesbury and Capco, has signalled its support for the two companies to explore a merger.
”Norges Bank has, therefore, subject to review of the final terms and conditions of any transaction, expressed its willingness in principle to support a combination in due course,” said the companies in the statement.
”Subject to finalisation of such terms, it is currently envisaged that the possible merger will be structured as an acquisition of Shaftesbury by Capco. Accordingly, for the purposes of the code, it has been agreed with the takeover panel that, until further notice, Shaftesbury will be treated as the offeree and Capco will be treated as the offeror.”