Capco and Shaftesbury have officially announced that they are engaged in advanced merger discussions. This news does not come as a surprise to those within the industry, as rumors of the potential merger have been circulating for some time now. If the merger successfully takes place, the combined company will have a significant presence in central London, as it will acquire ownership of key shopping areas such as Covent Garden, Carnaby, and Soho.
In addition to the merger, there will be significant changes in management. After serving the company for 36 years, Brian Bickell, CEO of Shaftesbury, will retire. Simon Quayle and Tom Welton, long-standing executive directors of Shaftesbury, will also be leaving after over 30 years of service. Alongside them, Capco’s chairman Henry Staunton and non-executive director Jonathan Lane will also retire from the board.
While the merger is structured as an acquisition of Shaftesbury by Capco, it is essentially a merger rather than one company absorbing the other. The resulting entity will form a real estate investment trust (REIT) primarily focusing on the West End of London. Its portfolio will include approximately 2.9 million square feet of lettable space in Covent Garden, as well as Shaftesbury’s key areas of Seven Dials, Carnaby, Chinatown, and Soho. The combined ownership will consist of around 1.8 million square feet of retail and hospitality space, along with 1.1 million square feet of office and residential accommodation.
The deal is expected to be an all-share transaction, with Capco shareholders owning 47% of the combined company and Shaftesbury shareholders (excluding the 25.2% shareholding already owned by Capco) owning the remaining 53%. However, due to Capco’s existing significant stake in Shaftesbury, it will hold a controlling position.
The leadership positions for the merged company have been determined. Ian Hawksworth, the current CEO of Capco, will assume the role of CEO for the combined entity, while Jonathan Nicholls, Chairman of Shaftesbury, will serve as Chairman. Situl Jobanputra will be the CFO, and Chris Ward will be the COO. The board will have strong non-executive representation from both companies, with Richard Akers serving as the senior independent director. An executive committee, consisting of leaders from both Capco and Shaftesbury, will be responsible for the day-to-day management of the company.
A major shareholder, Norges Bank, which holds shares in both Capco and Shaftesbury, has expressed its support for the merger. However, the final terms and conditions of the deal are still being reviewed.
While many details have been worked out and major shareholders are on board, the merger’s completion is still uncertain. The final terms have yet to be confirmed, and there are still factors that could impact the outcome. Only time will reveal what lies ahead for these two real estate giants.
Useful links:
1) Capco’s official website
2) Shaftesbury’s official website
