20 Jun 2022

Hogan Lovells and Herbert Smith Freehills act in £5bn London real estate merger

All-share merger of Capco and Shaftesbury one of the largest public M&A deals to be announced this year

London's Covent Garden Shutterstock

City law firms Hogan Lovells and Herbert Smith Freehills (HSF) have advised on the merger of FTSE 250 listed real estate companies Capital & Counties Properties (Capco) and Shaftesbury, one of the biggest public M&A deals to be announced this year.

Hogan Lovells advised long-time client Shaftesbury on the deal, while HSF acted for Capco. 

The merger brings together two of London's largest landlords to create a leading mixed-use real estate investment trust. The portfolio of the combined group – to be named Shaftesbury Capital – is valued at around £5bn and includes locations across the city’s West End such as Covent Garden, Carnaby, Chinatown and Soho.

The Hogan Lovells team was led by London corporate and finance partner Nicola Evans with support from fellow London corporate partner Anthony Doolittle. 

The firm has been an advisor to Shaftesbury for more than 30 years, with the real estate team, led by client relationship partner Gill McGreevy, advising on investment and asset management within the company’s West End portfolio as well debt and equity finance and corporate matters. In 2020 the firm advised Shaftesbury on its £300m equity capital raising, with team again led by Evans. 

The HSF team was headed by the London corporate M&A and ECM teams comprising partners Alex Kay, Heidi Gallagher, Stephen Wilkinson, Michael Jacobs and senior associate Sarah Ries-Coward, alongside associates Adam Goddard, Natassja Moczarski, Cassie Ayre and Stephanie Notice, and trainee solicitor Rupert Swallow. 

Kay also led the HSF team that advised Capco on its acquisition of a 26.3% stake in Shaftesbury two years ago for £436m.

Commenting on the merger, Kay said: "We are pleased to have supported Capco on this significant transaction involving multiple layers of complexity that required skilled navigation by all parties. It showcases the firm's strengths in the real estate sector and our public takeovers practice. It is extremely exciting to help put together a merger involving such iconic estates."

HSF said the merger would be implemented by way of a scheme of arrangement of Shaftesbury under Part 26 of the Companies Act, which, together with the existing Capco shareholding, will result in the Capco Group owning 100% of the issued and to be issued share capital of Shaftesbury on completion. 

As a result of the merger, Shaftesbury shareholders (other than the holders of the existing Capco shareholding) will own 53% and Capco shareholders 47% of the combined group respectively. 

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