Leading British real estate firms Capital & Counties Properties plc (Capco) and Shaftesbury plc are reportedly in advanced negotiations concerning a potential all-share merger that would bring London tourist attractions such as Soho and Covent Garden under one roof.
As per the agreement, Shaftesbury and Capco would own 53% and 47% shares respectively, although additional details regarding the merger deal are yet to be disclosed. However, sources claimed that the merged business could account for USD 4.3 billion worth.
The two companies cited that with this merger, the duo is expecting to create a real estate investment trust which will focus on London’s West End’s high-profile tourist destinations like Carnaby, Soho, Chinatown, and Covent Garden with a portfolio of 270,000 square meters. A major stockholder in both firms, Norway’s sovereign wealth fund, was also found to have backed the potential merger.
This deal between Capco and Shaftesbury comes as London has started to overcome pandemic lows, as well as travelers, are getting back on planes after almost two years as COVID-19 pandemic curbs and restrictions are easing.
During the early months of the COVID-19 pandemic in 2020, major British property deals came to a standstill and that’s when Capco bought a 26.3% stake in its rival Shaftesbury from Samuel Tak Lee, a Hong Kong property billionaire, for USD 538 million.
It is worth noting that the trust would be led by Ian Hawksworth, the CEO at Capco, and chaired by Jonathan Nicholls, the chairman of Shaftesbury whereas the current CEO of Shaftesbury for the past 11 years Brian Brickell will retire on the merger’s completion.
Blackdown Partners and Evercore are acting as legal advisors for the Shaftesbury board whereas Rothschild & Co. is advising Capital & Counties Properties (Capco).
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