* Capco buys Samuel Tak Lee's 26.3% stake in Shaftesbury
* 'We consider acquisition a shrewd move' - analysts
* Tak Lee withdraws legal proceedings against Shaftesbury
(Adds CEO quote, analyst comments, share move)
By Samantha Machado
June 1 (Reuters) - Capital & Counties Properties
has agreed to buy a 26.3% stake in London rival Shaftesbury
from Hong Kong tycoon Samuel Tak Lee's for 436 million
pounds ($540.7 million), the real estate manager said on Monday.
Both Capco and Shaftesbury own large parts of the real
estate in London's West End central area. Capco is acquiring the
stake from Veloqx, a trust fund set up by Tak Lee, for 540 pence
per share, a discount of 13.9% to Shaftesbury's closing share
price on Friday.
Major British property deals have all but come to a
standstill as the coronavirus outbreak has led to retailers and
other business halting rental payments, and cast doubt on both
current and future valuations of buildings and portfolios.
Capco shares rose 2.8% to 168 pence in early trade, while
Shaftesbury, which rose as much as 3% on Friday, fell 0.5% after
the deal was announced.
Capco said the deal, which is expected to be completed in
two tranches, would be fully funded through its shopping and
entertainment estate Covent Garden's revolving credit facility
of 705 million pounds.
"We consider the acquisition a shrewd move, utilising a
strong balance sheet to capitalise on an attractive valuation,"
Liberum analysts said in a note.
In order to deploy cash towards the deal, Capco will not
complete the share buy-back of 100 million pounds to
shareholders, the FTSE-250 listed company said.
Rothschild & Co was the lead financial adviser and sponsor
for Capco on the deal.
Separately, Shaftesbury said Tak Lee has withdrawn all legal
proceedings against it over allegations and claims related to a
2017 share placement conducted by the company.
($1 = 0.8063 pounds)
(Reporting by Samantha Machado in Bengaluru; Editing by Arun
Koyyur and Pravin Char)
