(Sharecast News) - Capital & Counties and Shaftesbury said on Thursday that they have agreed the terms of a £3.5bn all-share merger that will create a combined group with a portfolio valued at around £5bn.
Under the terms of the deal, shareholders will receive 3.356 new Capco shares for each Shaftesbury share held. Shaftesbury shareholders will own 53% of the combined entity, while Capco holders will own the rest.
The combined group's portfolio will comprise approximately 670 predominantly freehold buildings with around 2.9m square feet of lettable space across 2,000 commercial and residential units.
Shaftesbury chairman Jonathan Nicholls said: "The merger of Shaftesbury and Capco unites two complementary and adjacent real estate portfolios under single ownership. Shaftesbury Capital will own a first-class portfolio in some of the most iconic destinations across London's vibrant West End.
"The experienced leadership team, with their impressive track record of innovation and curation, should ensure a sustainable and prosperous future for our destinations, the communities they serve and our wider stakeholders. With cost and operational synergies, a strong corporate governance framework, increased scale and greater equity market liquidity, the combination also provides a firm foundation for future value creation for our shareholders."
The new company will be called Shaftesbury Capital and will be led by Jonathan Nicholls as non-executive chairman and Ian Hawksworth as chief executive.
At 1000 BST, Shaftesbury shares were down 8.9% at 530.50p.
Mike Fox, head of Sustainable Investments at Royal London Asset Management - which hold a 3% stake in Shaftesbury - said: "The terms announced today are unattractive and fail to reflect the inherent value of the Shaftesbury estate. It is unclear why it is in the interests of Shaftesbury shareholders to accept them."
