Capco and Shaftesbury agree on €4bn merger (GB)

Capco and Shaftesbury agree on €4bn merger (GB)

The Boards of Capital & Counties Properties PLC (Capco) and Shaftesbury PLC have reached an agreement on the terms of a recommended all-share merger to form the combined group. Following the completion of the deal, Shaftesbury shareholders will comprise 53% of the combined group. 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 €5.8bn (£5bn), and annualised gross income of approximately €192.5m (£165.5m) and an estimated rental value of approximately €253.6m (£218m) as at 31 March 2022.


The combined group's portfolio will comprise approximately 670 predominantly freehold buildings with approximately 2.9 millionft² of lettable space across 2,000 commercial and residential units (excluding the Longmartin Joint Venture and Lillie Square Joint Venture).  The properties are located across London's West End, including Covent Garden, Carnaby, Chinatown, and Soho.


Commenting on the Merger, 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."


Commenting on the Merger, 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."


Commenting on the Merger, Ian Hawksworth, Chief Executive of Capco, said: "The proposed merger is an exciting opportunity to bring together two exceptional property portfolios in London's vibrant and thriving West End. By combining the creativity and knowledge of our talented and experienced management teams to deliver sustained income and value growth Shaftesbury Capital aims to become a leading central London mixed-use REIT. I am very much looking forward to working with my new and existing colleagues as we continue to curate wonderful places and experiences for our occupiers, visitors, local workers and residents in the heart of one of the world's greatest cities."


Commenting on the Merger, Brian Bickell, Chief Executive of Shaftesbury, said: "Over the last 36 years, Shaftesbury has built a portfolio of the highest quality and it has been an honour to lead the company as Chief Executive for the last 11 years. As we emerge from the disruption of the pandemic, we are seeing increased confidence and growth once again, demonstrating the resilience of the West End and our locations. The merged business will have an exceptional portfolio, located in popular and busy parts of London's vibrant West End, and an experienced and innovative team drawn from both businesses. I am confident that Shaftesbury Capital will continue to be a major contributor to the success of London's West End as well as an attractive proposition for investors."

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