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West End landlords Shaftesbury and Capco close to £3.5bn merger

Two of the most important landlords within the West End are in talks over a £3.5bn merger which might convey collectively a few of central London’s finest identified vacationer locations underneath the possession of a single firm.

Capital & Counties, which owns Covent Garden and the encompassing space, and Shaftesbury, which has a portfolio spanning components of Soho, Chinatown and Carnaby Street, confirmed on Saturday night that they’re in detailed negotiations over plans to mix their portfolios.

The deal may very well be agreed within the subsequent few weeks and the merged companies would have a mixed valuation of round £3.5bn, in response to folks aware of the discussions.

There has been persistent hypothesis over the previous two years that the 2 companies would possibly come collectively, stoked by Capco shopping for a 26 per cent stake in Shaftesbury from Hong Kong actual property tycoon Samuel Tak Lee within the early months of the pandemic in 2020.

Shaftesbury and Capco share a serious shareholder in Norges Bank, the Norwegian state fund which has signalled its assist for a merger, in response to the businesses.

The neighbouring landlords have labored in tandem on their response to coronavirus over the previous two years, a interval through which tourism and visits from consumers have collapsed and dragged down the worth of properties within the space significantly.

Management groups at each corporations have beforehand spoken in regards to the potential benefits of bringing collectively the companies, which embody the flexibility to curate massive swaths of the West End.

A mixed entity would have the flexibility to extra readily increase money to spend money on the property and doubtlessly to develop, mentioned one particular person with information of the talks.

With a market capitalisation of £2.2bn, Shaftesbury is the bigger of the 2 corporations, with Capco valued at £1.4bn. 

The proposed construction of the deal would see shareholders in Shaftesbury, excluding the quarter of the enterprise held by Capco, proudly owning 53 per cent of the mixed firm, with Capco shareholders proudly owning the rest.

The merged firm could be led by Ian Hawksworth, presently boss of Capco, and chaired by Jonathan Nicholls, presently chair of Shaftesbury.

Brian Bickell, who has been chief government of Shaftesbury for 11 years, will retire on completion of the deal and daily administration of the property will fall to a staff drawn from executives from each corporations.

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