Councilors pocket nearly £70m from Shaftesbury and Capital & Counties merger

Advisers to two of the West End’s biggest landlords will pocket nearly £70million in fees following the £5billion merger of Shaftesbury and Capital & Counties.

Shaftesbury, whose portfolio spans parts of Soho and Carnaby Street, is paying out £35.7m to bankers, barristers, legal and communications advisers, while Capco, owner of Covent Garden, is handing out £33m pound sterling.

Capco’s advisers include bankers Rothschild, UBS and Jefferies, while Evercore and Blackdown back Shaftesbury on the deal which has met with opposition from investors.

First mooted before the pandemic, the merger faces the hurdle of a shareholder vote on July 29. Two of Shaftesbury’s investors, Royal London Asset Management and Investec, have previously raised concerns about whether it was in the best interests of shareholders.

However, Norges Bank Investment Management, Norway’s sovereign wealth fund, is set to vote in favor of the deal. He owns 25% and 15% of Shaftesbury and Capco respectively, as the biggest investor of the two.

The company’s expanded portfolio would cover 670 buildings, comprising 2.9 m² of square feet and 2,000 commercial and residential units.

Once merged, it could cut its workforce by nearly a third, according to a plan document ahead of the meeting.

He added: “This review is expected to take 12 months after its completion. This could result in a workforce reduction of approximately 30% across the combined group, the extent of which will depend on the outcome of this detailed review.”

However, some senior members of staff are set to receive exceptional salary increases and bonuses of up to 25% of their salary. The document adds that ‘affected members of senior management are expected to include a pay rise of £366,500 in total’.

Under the deal, Shaftesbury will own 53% of the newly merged company, named Shaftesbury Capital, while Capco shareholders will control 47%. After completion, businesses are expected to reduce their annual costs by £12 million.

Ian Hawksworth, managing director of Capco, will become boss. Brian Bickell, who was Shaftesbury boss for more than a decade, will step down once the deal is complete. Shaftesbury and Capco had no comment.

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