Property firms Shaftesbury and Capital & Counties confirmed on Monday that they are in advanced discussions about a possible merger.
Responding to press speculation over the weekend of a £3.5bn deal, they said: “The possible merger would create a REIT focused on the West End of London with a portfolio of circa 2.9 million square feet of lettable space located in high-profile destinations including Covent Garden, Carnaby, Chinatown and Soho.
“The combined ownership would comprise c.1.8 million square feet of retail and hospitality space, together with office and residential accommodation of c.1.1 million square feet.”
Under the terms of the possible merger, Shaftesbury shareholders – excluding the Shaftesbury shareholding owned by Capco – would own 53% of the combined company, while Capco shareholders would own the rest. Capco currently owns around 97m shares in Shaftesbury, which is stake of about 25.2%.
The companies said that Norges Bank, a major shareholder in both property firms, understands the strategic rationale and has signalled its support for them to explore a merger.
