Yahoo Finance Advisers pocket near £70m from Shaftesbury and Capital & Counties merger
Advisers to two of West End's biggest landlords will pocket nearly £70m in fees following Shaftesbury and Capital & Counties £5bn merger.
Shaftesbury, whose portfolio stretches parts of Soho and Carnaby Street, is paying £35.7m to bankers, lawyers, legal and communications advisers, while Capco, which owns Covent Garden, is dishing out £33m.
Capco's advisers include bankers Rothschild, UBS and Jefferies, while Evercore and Blackdown are supporting Shaftesbury on the deal that has faced investor opposition.
First mooted before the pandemic, the merger faces the hurdle of passing a shareholder vote on July 29. Two of Shaftesbury’s investors, Royal London Asset Management and Investec, have previously raised concerns about whether it is in the best interest of shareholders.
However, Norges Bank Investment Management, the Norwegian sovereign wealth fund, is poised to vote in favour of the deal. It holds 25pc and 15pc in Shaftesbury and Capco, respectively, as the largest investor of both.
The enlarged company portfolio would span 670 buildings, comprising 2.9m sq ft and 2,000 commercial and residential units.
Once merged, it could cut its workforce by nearly a third, according to a scheme document ahead of the meeting.
It added: "This review is expected to take 12 months following completion. This could lead to a reduction of approximately 30 per cent in headcount across the combined group, the full extent of which will be dependent on the outcome of this detailed review".
However, some senior members of staff are poised to receive bumper pay rises and bonuses worth up to 25pc of their salary. The document added that "relevant members of senior management are expected to include an increase to salaries of £366,500 in aggregate".
As part of the deal, Shaftesbury will own 53pc of the newly-combined company, named Shaftesbury Capital, while Capco shareholders will control 47pc. Following completion, the companies are expected to cut £12m from its annual costs.
Ian Hawksworth, Capco's chief executive, will become boss. Brian Bickell, who has been Shaftesbury boss for more than ten years, will step down once the deal is complete. Shaftesbury and Capco did not comment.
