LONDON, UK: Capital & Counties Properties (Capco) and Shaftesbury PLC have reached agreement on the terms of a recommended all-share merger to form the combined group to be called Shaftesbury Capital PLC on completion, a statement noted.

It is intended that the merger will be implemented by way of a scheme of arrangement of Shaftesbury, which will result in the Capco Group owning 100% of the issued and to be issued share capital of Shaftesbury.

Key terms

· Under the terms of the Merger, the Scheme Shareholders shall be entitled to receive: 3.356 New Capco Shares for each Shaftesbury Share held

· As a result of the Merger, Shaftesbury Shareholders (other than the holders of the Existing Capco Shareholding) will own 53% of the Combined Group and Capco Shareholders will own 47% of the Combined Group.

· The Exchange Ratio has been agreed between the Boards of each of Capco and Shaftesbury taking into account the relative EPRA NTA and market capitalisations of both companies.

· The Capco Group already holds 96,971,003 Shaftesbury Shares, representing approximately 25.2% of Shaftesbury’s issued share capital, as at close of business on the Last Practicable Date.

The merger will bring together two respected real estate companies, located in some of the most iconic parts of London’s West End, to create a leading mixed-use central London REIT, with the combined group’s portfolio valued at approximately £5.0 billion, Annualised Gross Income of approximately £165.5 million and an estimated rental value (“ERV”) of approximately £218.0 million as at 31 March 2022.

The combined Group’s portfolio will comprise approximately 670 predominantly freehold buildings with approximately 2.9 million square feet of lettable space across approximately 2,000 commercial and residential units (excluding the Longmartin Joint Venture and Lillie Square Joint Venture).

The combined Group has a shared commitment to becoming Net Zero Carbon by 2030. The objective is to become a UK leader in sustainability for heritage and period properties. Harnessing the skillsets of both teams, the Combined Group will continue to adopt the existing approach to focus on re-using, improving and re-purposing buildings to extend their useful lives and enhance their energy performance credentials.

Commenting on the merger, Ian Hawksworth, Chief Executive of Capco, said: “The proposed merger is an exciting opportunity to bring together two exceptional property portfolios in London’s vibrant and thriving West End. By combining the creativity and knowledge of our talented and experienced management teams to deliver sustained income and value growth Shaftesbury Capital aims to become a leading central London mixed-use REIT.

I am very much looking forward to working with my new and existing colleagues as we continue to curate wonderful places and experiences for our occupiers, visitors, local workers and residents in the heart of one of the world’s greatest cities.”

Commenting on the merger, Brian Bickell, Chief Executive of Shaftesbury, said: “Over the last 36 years, Shaftesbury has built a portfolio of the highest quality and it has been an honour to lead the company as Chief Executive for the last 11 years. As we emerge from the disruption of the pandemic, we are seeing increased confidence and growth once again, demonstrating the resilience of the West End and our locations. The merged business will have an exceptional portfolio, located in popular and busy parts of London’s vibrant West End, and an experienced and innovative team drawn from both businesses. I am confident that Shaftesbury Capital will continue to be a major contributor to the success of London’s West End as well as an attractive proposition for investors.”