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West End landlords Shaftesbury and Capco agree £5bn merger

Two of West End’s major homeowners have agreed to merge, creating a £ 5bn estate that spans some of London’s best-known tourist destinations.

Beer and countiesThe owner of Covent Garden, and Shaftesbury, which has a portfolio covering parts of SoHo, Chinatown and Carnaby Street, announced on Thursday morning agreed terms for merging all the shares.

The deal will be subject to shareholder approval, and companies are expected to face some push, with two Shaftesbury Investors – Royal London Asset Management and Investec – have already asked if a merger is in their favor.

However, the largest shareholder in Shaftesbury and Kapko, Norges Bank Investment Management, the Norwegian sovereign wealth fund, will vote in favor of the deal.

The fund, which owns 25% of Shaftesbury shares and 15% of Capco shares, has long supported the merger, according to the companies.

Under the terms of the deal, existing shareholders in Shaftesbury will own 53% of the newly formed group, and Capco shareholders 47%.

Ipan Hawksworth, CEO of Capco, will become head of the combined group, to be called Shaftesbury Capital.

Brian Bickle, who has led Shapsbury for more than a decade, will retire upon completion of the merger.

The deal will bring an end to the courtship that preceded the epidemic, with the two companies talking for a long time about the benefits of a relationship that would give the combined group control of one of the capital’s most popular retail and leisure destinations.

Hawksworth said the new management team will seek to invest in the West End public space and focus on continuity rather than change.

He described his role as “doing lots and lots of really small things. It’s about creating vibrant areas and a lot of options for consumers,” [playing a] A long-term custody role for this estate. “

The recovery of the area, since Covid-19 forced tenants to close stores for long periods of 2020 and 2021, has given the management of both teams more confidence to continue the deal, he added.

Over the next two years, Shaftesbury Capital expects to cut £ 12 million from its annual costs as a result of the merger.

The companies expect to complete the deal before the end of the year, when shareholders will receive 3.35 new shares of Capco for each Shaftesbury share.

However, not every shareholder is supportive.

Mike Fox, head of sustainable investment at Royal London Asset Management, said: “The terms announced today are unattractive and do not reflect the inherent value of the Shipsbury mansion. It is not clear why it is in the interests of the Shipsbury shareholders to accept them.”

Investec, which holds a 1.65% legal stake, has also raised concerns about the merger in the past.

Capco was advised by Rothschild & Co., UBS and Jeffries. Shaftsbury was advised by Ibercour and Blackdown.

West End landlords Shaftesbury and Capco agree £5bn merger Source link West End landlords Shaftesbury and Capco agree £5bn merger

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