Capco invests £436 million to purchase Hong Kong tycoon’s 20.9% stake in Shaftesbury

Written by: Wajeeh Khan
June 1, 2020
  • Capco buys 64.4 million shares of Shaftesbury for £436 million representing a 20.9% stake.
  • The property manager says its deal with Veloqx for £5.4 per share will be completed on 2nd June.
  • The British company may expand its investment by another 16.3 million shares at a later stage.

In an announcement on Monday, Capital & Countries Properties (LON: CAPC) said that it has finalised an agreement to purchase Samuel Tak Lee’s stake in Shaftesbury (LON: SHB) for £436 million. The Hong Kong tycoon had a 26.3% stake in Capco’s rival located in central London.

Capital & Countries Properties was reported 1.7% up while a 2.7% decline in Shaftesbury was seen in premarket trading on Monday. At 168 pence per share, Capco is roughly 35% down year to date in the stock market. The UK property investment and development company recently sold its Earls Court estate for £425 million.

Capco sealed the deal with Veloqx for £5.4 per share

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Tak Lee set up a trust fund in Singapore by the name of Veloqx in 2005 that held and managed his stake in Shaftesbury. Capco revealed on Monday that the deal has been sealed with Veloqx for £5.4 per share that translates to a 13.9% discount on Shaftesbury’s closing share price on Friday.

The agreement marks the first in the United Kingdom after the Coronavirus pandemic that brought the property sector to a near halt as retailers and a range of other businesses resorted to deferring rental payments in a bid to shore up finances amidst the health crisis. The pandemic also fuelled uncertainty in this sector that made it difficult to value buildings and portfolios at large.  

The flu-like virus has so far infected more than a quarter-million people in the UK and caused over 38,000 deaths.

Capco says the transaction will be completed on 2nd June

Owner of Covent Garden, Capco said that it will invest £436 million in Shaftesbury to purchase 64.4 million shares of the company. Following the completion of the transaction on 2nd June, Capco will have a 20.9% stake in the British real estimate investment trust (REIT). Learn more about how to invest in REITs.

The UK property manager also announced plans of expanding its investment in Shaftesbury by another 16.3 million shares for £88 million (cash) at a later stage.

Rothschild & Co served as the sponsor and lead financial adviser of Capco’s agreement.

In separate news, Shaftesbury also said on Monday that the Hong Kong tycoon has suspended all litigations over allegations associated with the company’s share placement that was conducted in 2017.

Capco’s performance in the stock market was reported fairly upbeat in 2019 with an annual gain of a little under 15%. At the time of writing, the British property manager has a market cap of £1.43 billion. Shaftesbury, on the other hand, is currently valued at £1.92 billion.