With Capco and Shaftesbury, two real estate companies in London’s West End could come under one roof. The billion-dollar deal would also be an indication of the state of the entertainment industry in the area.
People sit at a cafe in Covent Garden, London, on December 29, 2021.
One of the largest listed real estate companies in Great Britain is emerging in London’s West End. With world-famous theaters shutting down during the pandemic, tourists staying absent and a slew of popular retail and restaurant chains – from Byron Burgers to Prezzo – defaulting, there are signs of footfall stabilizing in metropolitan entertainment districts.
While not yet back to pre-pandemic levels, analysts say valuations and rental income are unlikely to fall any further. It was almost inevitable that Covent Garden-heavy Capital & Counties (Capco) would approach rival Shaftesbury, which owns numerous properties in Carnaby, Chinatown and Soho. Especially since their boss Brian Bickell wants to retire after 36 years with the company. Capco had already shown interest in May 2020 when it acquired the 26 percent stake of Hong Kong real estate billionaire Samuel Tak Lee.
When, if not now, Capco boss Ian Hawksworth will have thought. He is certain of the support in principle of his major shareholder Norges Bank, which also owns 25 percent of Shaftesbury. The proposed stock swap merger is Capco’s acquisition of the larger Shaftesbury. The advantages are obvious: a market capitalization of £3.6 billion brings more liquidity. In addition, the costs for administration and board of directors could be reduced.
And investors may be willing to give Shaftesbury-enhanced Capco the premium they were willing to pay for Shaftesbury.