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Published
May 9, 2022
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Capco-Shaftesbury merger talks confirmed, veteran leaders to retire

Published
May 9, 2022

Shaftesbury and Capco have confirmed long-expected merger talks with the companies saying that they're in advanced discussions, although there's still a chance a deal might not happen.


Photo: Sandra Halliday



If it does, it would see the combined company owning vast tracts of central London, including key shopping areas in Covent Garden, Carnaby and Soho.

It would also mean a major management change as after 36 years at Shaftesbury, including 11 years as CEO, Brian Bickell will retire on completion of the transaction. 

Long-standing executive directors Simon Quayle and Tom Welton, who have also been with the company for over 30 years, will leave too. And chairman Henry Staunton plus non-exec director Jonathan Lane will retire from the board of Capco.

Assuming it does go ahead, it will “be structured as an acquisition of Shaftesbury by Capco”, although it will effectively be a merger rather than one being swallowed up by the other.

The possible merger would create a real estate investment trust (REIT) focused on the West End of London with a portfolio of around 2.9 million square feet of lettable space in Covent Garden — where Capco is particularly strong — plus Shaftesbury’s key areas of Seven Dials, Carnaby, Chinatown and Soho. 

The combined ownership would comprise around 1.8 million square feet of retail and hospitality space, together with office and residential accommodation of around 1.1 million square feet.

So how will it all work? It’s set to be an all-share deal with Capco shareholders owning 47% of the combined company and Shaftesbury shareholders (excluding the Shaftesbury 25.2% shareholding owned by Capco), holding the other 53%. But that existing slice of Shaftesbury already owned by Capco clearly puts it n the driving seat.

The companies said the ownership ratios have been agreed between the two boards “taking into account the relative net tangible assets and market capitalisations of both companies”.

So given the execs who are leaving, who will be in charge? The combined company will have a clear governance and leadership structure, led by current Capco chief executive Ian Hawksworth as CEO and Shaftesbury chairman Jonathan Nicholls in the same role at the newly merged firm. Situl Jobanputra will be CFO and Chris Ward will be COO. 

The board will contain strong non-executive representation from both companies, with Richard Akers as the senior independent director.

An executive committee, with equal representation from the existing Shaftesbury and Capco leadership teams, will be responsible for the day-to-day management and operation of the combined company. Capco’s Michelle McGrath will oversee the combined Covent Garden portfolio, and Shaftesbury’s Andrew Price will cover Carnaby, Chinatown and Soho, with Shaftesbury’s Samantha Bain-Mollison handling group leasing.

The firms said that a major shareholder of both — Norges Bank — “understands the strategic rationale and has signalled its support for the two companies to explore a merger. Norges Bank has, therefore, subject to review of the final terms and conditions of any transaction, expressed its willingness in principle to support a combination in due course”.

So, back to that point about there being no certainty that it will happen. Admittedly, the full terms haven’t been finalised, but it does look like many of the details have been ironed out and the support of major shareholders confirmed. We’ll have to wait and see what happens.

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