(Alliance News) - Capital & Counties Properties PLC said Monday it has acquired a 26% stake in Shaftesbury PLC, a real estate company focused on London's west-end entertainment district, for GBP436 million, or 540 pence per share.
Shares in Shaftesbury were down 1.0% at 620.50p in London. Capital & Counties stock was 2.1% higher at 167.00p in London, while its Johannesburg shares were up 2.9% at ZAR36.22.
Capital & Counties bought the shares from Veloqx Jersey Ltd, a company owned by Hong Kong-based property magnate Samuel Tak Lee.
The acquisition will be scheduled in two tranches, with 64.4 million shares being acquired for GBP348 million and the second tranche for 16.3 million shares for GBP88 million.
The investment is being funded fully through the GBP705 million Covent Garden revolving credit facility, of which GBP225 million remains available for drawdown, Capital & Counties said.
As a result of this transaction, the legal proceedings against Shaftesbury by Tak Lee has been withdrawn.
In June 2019, Tak Lee launched proceedings related to allegations and claims relating to a December 2017 placing conducted by the FTSE 250-listed real estate investment trust.
In this placing, Shaftesbury issued 27.9 million shares at a price of 952p per share, carried out on a non pre-emptive basis and at a 6.6% discount to the firm's closing share price on December 5, 2019, of 1,001.00p.
Back then, Lee claimed that the placing was not beneficial to all shareholders as the short time period made it hard for other investors to take part.
Capital & Counties Chief Executive Ian Hawksworth said: "As long-term investors in the Covent Garden estate and the west end, the investment in Shaftesbury represents a unique opportunity to deploy our capital in an exceptional portfolio at an attractive entry price, which we believe will generate long-term value for Capco shareholders
"Capco's world-class estate, strong balance sheet and significant financial flexibility ensure that the company is well positioned. Whilst we can expect continued market uncertainty in the near term, we are confident about the long-term fundamentals and prospects for the west end and prime central London.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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