Listed UK property groups Capital & Counties Properties (Capco) and Shaftesbury have agreed to merge to create a mixed-use central London real estate investment trust with a 拢5bn (鈧�5.9bn) portfolio.
Following an announcement last month confirming 鈥漚dvanced discussions regarding a possible all-share merger鈥�, the two companies said they have now agreed to a merger whereby Shaftesbury shareholders are being offered 3.356 new Capco shares for each Shaftesbury share they hold.
The Capco Group already holds approximately 25.2% of Shaftesbury鈥檚 issued share capital.
Subject to approvals, Shaftesbury and Capco shareholders will own 53% and 47% respectively of the combined group which will be called Shaftesbury Capital.
The companies said the merger is supported by Norges Bank, which holds a 26% stake in Shaftesbury and a 15% stake in Capco. Madison International Realty Holdings, a 4.1% shareholder of Capco, has also agreed to vote in favour of the merger.
Commenting on the merger, Mike Fox, the head of sustainable investments at Royal London Asset Management, said the merger terms are 鈥渦nattractive and fail to reflect the inherent value鈥� of the Shaftesbury estate. 鈥淚t is unclear why it is in the interests of Shaftesbury shareholders to accept them.鈥� Royal London Asset Management holds 3% in Shaftesbury.
Shaftesbury, which has a market capitalisation of around 拢2.1bn, invests exclusively in London鈥檚 West End. Its portfolio is clustered mainly in iconic retail and restaurant locations in Carnaby, Seven Dials and Chinatown. Shaftesbury鈥檚 portfolio also includes substantial ownerships in East and West Covent Garden, Soho and Fitzrovia.
Capco鈥檚 portfolio includes the landmark Covent Garden estate, which represents over 1.1m sqft of space. Capco has a market capitalisation of around 拢1.3bn.
The combined group鈥檚 portfolio will comprise approximately 670 predominantly freehold buildings with approximately 2.9m sqft of lettable space across 2,000 commercial and residential units.
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