West End property landlord Capital & Counties (Capco) is in talks to acquire a 26.3% stake in rival Shaftesbury, potentially paving the way for a multi-billion pound takeover.
Capco, which owns a vast chunk of Covent Garden, confirmed it was in discussions to buy the stake from Hong Kong billionaire Samuel Tak Lee following a story on React News, the property news website.
“Capco confirms that it is in discussions regarding the potential acquisition of a 26.3% shareholding in Shaftesbury,” it said in a stock market announcement. “There can be no certainty that these discussions will lead to any agreement between Capco and the selling shareholder.”
Mr Lee is thought to be seeking £5 per share, or £404.1m, for his stake.
If the talks progress, it could lead to a takeover approach for Shaftesbury that would combine two of London’s most valuable estates.
Capco owns a £2.6bn estate in Covent Garden covering 1.2m square foot of shops, restaurants and offices. Shaftesbury has a £4bn property portfolio that spans 15 acres of Chinatown, Carnaby, Soho, Covent Garden and Fitzrovia.
Last year Capco sold a vast residential development site in Earls Court, west London, for £425m, boosted its cash reserves. At the end of March 2020, it said it had £250m of cash with a further £120m due from the sale of Earls Court.
Shaftesbury’s share price has fallen by around 25% since the start of March, as the majority of its shops and restaurants have been shut due to the lockdown.
Shaftesbury’s management has endured a difficult relationship with its biggest shareholder, Samuel Tak Lee, in recent years. Mr Lee launched legal action against the company last year over alleged losses from a £265m fundraising in 2017 that he says diluted his stake. Shaftesbury has disputed the claims and said it would defend the allegations robustly.
CAPC SHB : Capco eyes up takeover of Shaftesbury
A further announcement will be made in due course, if appropriate.