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Shaftesbury and Capco confirm “advanced discussions” for potential 3.5 billion pound merger

By Rachel Douglass

9 May 2022

Retail

Image: Shaftesbury, Carnaby Street

London real estate giants Shaftesbury and Capco have confirmed they are currently in “advanced discussions” for a potential all-share merger that would see the duo bring together an expansive combined retail portfolio.

In a press release from Shaftesbury, the firm stated that the merger would result in a Real Estate Investment Trust focused on the West End of London, consisting of a combined portfolio of 2.9 million square feet of leasable space. This would also include city landmarks like Covent Garden, Carnaby, Chinatown and Soho.

Initially reported by Sky News over the weekend, the publication said the potential merger could generate a combined valuation of 3.5 billion pounds.

While still in discussions, Shaftesbury confirmed its proposed terms consist of its shareholders owning 53 percent of the combined company, with Capco shareholders to own 47 percent. The firm noted that Capco currently already owns shares representing 25.2 percent of its existing share capital and that, if agreed upon, the merger will be structured as an acquisition of Capco by Shaftesbury.

Shaftesbury CEO and directors to step down

Furthermore, alongside the merger, the companies will also be implementing a range of leadership adjustments, with the combined company to be led by Jonathan Nicholls and Ian Hawksworth as joint CEO. Additionally, Situl Jobanputra is to be the new CFO and Chris Ward will take on the position of COO.

The new arrangement will also see Shaftesbury CEO, Brian Bickell, step down after 36 years at the company, as well as other executive and non-executive directors from both firms.

Day-to-day management and operations of the combined company will consist of equal representation from both parties in the form of an executive committee, with Capco’s Michelle McGrath to oversee the Covent Garden portfolio and Shaftesbury’s Andrew Price responsible for Carnaby, Chinatown and Soho.

Capco will be required to make a decision on the merger by June 4 and is currently receiving financial advice from Rothschild and Co. Shaftesbury is being advised by Evercore and Blackdown Partners.