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Thu 16th Jun 2022 - West End landlords Shaftesbury and Capco agree £3.8bn merger
West End landlords Shaftesbury and Capco agree £3.8bn merger: West End landlords Shaftesbury and Capital & Counties (Capco) have agreed a £3.8bn merger to bring together some of central London’s best known tourist destinations under the ownership of a single company. Capco, which owns Covent Garden and the surrounding area, and Shaftesbury, which has a portfolio spanning parts of Soho, Chinatown and Carnaby Street, will combine their portfolios. With a market capitalisation of £2bn, Shaftesbury is the larger of the two companies, with Capco valued at £1.8bn. The structure of the deal will see shareholders in Shaftesbury, excluding the quarter of the business held by Capco, owning 53% of the combined company, with Capco shareholders owning the remainder. It is intended the combined group will be called Shaftesbury Capital on completion and retain Capco’s listing on the stock exchange. The merger is subject to approval by shareholders of both companies. The companies stated: “The combined group has estimated earnings per share net tangible assets of approximately £3.8bn and estimated earnings per share net tangible assets per share of approximately 207 pence as at 31 March 2022. The merger will bring together two respected real estate companies, located in some of the most iconic parts of London’s West End, to create a leading mixed-use central London real estate investment trust, with the combined group’s portfolio valued at approximately £5bn, annualised gross income of approximately £165.5m and an estimated rental value of approximately £218.0m as at 31 March 2022. The combined group’s portfolio will comprise approximately 670 predominantly freehold buildings with approximately 2.9 million square feet of lettable space across approximately 2,000 commercial and residential units (excluding the Longmartin joint venture and Lillie Square joint venture). At 31 March 2022, the combined group’s portfolio comprised retail: 35% (approximately £1.7bn) of the portfolio value; hospitality and leisure: 34% (approximately £1.7bn) of the portfolio value; and offices and residential: 31% (approximately £1.6bn of the portfolio value split as 14% residential and 17% offices). By combining both companies’ strengths, cultures and values as well as their proven operating and investment models, the combined group’s management team will take a ‘best of both’ approach to operations with the aim of delivering long-term economic and social value for all stakeholders. The boards of Capco and Shaftesbury, each having taken independent financial advice, unanimously believe that the Merger is in the best interests of their respective company’s shareholders as a whole.” The merged company will be led by Ian Hawksworth, currently boss of Capco, and chaired by Jonathan Nicholls, currently chair of Shaftesbury. Situl Jobanputra will be the chief financial officer and Chris Ward will be the chief operating officer. The board of the will contain non-executive representation from both companies, with four current Shaftesbury directors, being Richard Akers (as the senior independent director), Jennelle Tilling, Ruth Anderson and Helena Coles joining the board of the combined group and two current Capco directors, being Charlotte Boyle and Anthony Steains, remaining in place. Brian Bickell, who has been chief executive of Shaftesbury for 11 years, will retire on completion of the deal. Executive directors Simon Quayle and Tom Welton, who have been with Shaftesbury for 35 and 33 years respectively, will also leave the business. Henry Staunton, Capco’s chairman, who has served on the Capco board for 12 years, will retire on completion. Jonathan Lane, non-executive director, who has served on the Capco board for three years since March 2019 and previously had been chief executive and chairman of Shaftesbury for 30 years in total from 1986 to 2016, will also retire from Capco’s board on completion. There has been persistent speculation over the past two years that the two businesses might come together, stoked by Capco buying a 26% stake in Shaftesbury from Hong Kong real estate tycoon Samuel Tak Lee in the early months of the pandemic in 2020. Shaftesbury and Capco share a major shareholder in Norges Bank, the Norwegian state fund that signalled its support for a merger. The neighbouring landlords have worked in tandem on their response to coronavirus over the past two years, a period in which tourism and visits from shoppers have collapsed and dragged down the value of properties in the area considerably. Management teams at both companies have previously spoken about the potential advantages of bringing together the businesses, which include the ability to curate large swaths of the West End.

Only ten of 589 companies in next edition of Propel Turnover & Profits Blue Book generating pre-tax profit of more than £20m: Only ten of the 589 companies featured in the next edition of the Propel Turnover & Profits Blue Book are generating pre-tax profit of more than £20m. Premium subscribers will receive the latest edition of the Blue Book, which is produced in association with Mapal Group, on Friday, (17 June) at midday. The Blue Book shows the effects of the pandemic, with total losses of £5.8bn being reported by 348 companies. However, a further 241 sector companies are still reporting total profits of £1.1bn. The 589 UK pub, restaurant, cafe and hotel operators featured have a total turnover of £28.6bn. In the next edition, 31 companies have also reported updated accounts. The Blue Book, which is updated every month, provides an insight into UK operator turnover and profitability over five years, profit conversion and directors’ earnings. Premium subscribers also receive the New Openings Database, produced in association with StarStock, and the Multi-Site Operators Database, produced in association with Virgate, which are also updated each month. Premium subscribers also now have access to the UK Food and Beverage Franchisor Database, which is an exhaustive guide to the companies offering a food and beverage franchise in the UK and will be updated every two months. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £895 plus VAT – whether they are an operator or a supplier. The single subscription rate is £445 plus VAT for operators and £545 plus VAT for suppliers. Email jo.charity@propelinfo.com to upgrade your subscription. Subscribers also receive access to Propel’s library of lockdown videos and Friday Wrap interviews and also have access to a curated video library of the sector’s finest leaders and entrepreneurs, offering their insights on running outstanding businesses in the sector. Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out; regular video content and regular exclusive columns from Propel group editor Mark Wingett.

BrewDog fires up £12m green gas plant powered by brewing waste: Scottish brewer and retailer BrewDog has taken a huge step towards its goal of becoming the world’s most sustainable drinks company with the commissioning of its green gas plant that will power the production of more than 176 million pints of beer a year at its Ellon headquarters. The new £12m bio-energy plant will mean 7,500 less tonnes of carbon emissions every year when running at full capacity. Later this year BrewDog plans to begin using surplus green gas to fuel delivery vehicles, as well as helping to decarbonise the national grid. Since the new brewery in Ellon opened in 2013, BrewDog has reduced the volume of water it takes to make its beer by more than 50%, but there is still waste created by the brewing process. The anaerobic digester will help BrewDog recycle most of the 200 million litres of wastewater produced every year in the beer-making process, as well as generating bio-methane to power the brewery’s boilers. The plant combines the wastewater with spent yeast and hops from the brewing process to be “digested” by bacteria to make bio-methane. Over the coming years, BrewDog also plans to use the carbon dioxide created by the digester to carbonate its beer. When fully operational, the digester will create around 200 cubic metres of biomethane per hour – equivalent to around 23,000MWh of energy per year and enough to heat more than 1,500 homes. The facility forms the centrepiece of BrewDog’s £50m investment plans to slash carbon emissions per hectolitre of beer by 35% versus its baseline in 2019. As well as powering the brewery, the biomethane produced will be used to create compressed natural gas to power delivery trucks, which will deliver the beer to its Glasgow distribution hub. Sarah Warman, BrewDog’s director of sustainability, said: “Our number one sustainability goal is to reduce emissions, and we want to lead the way for the entire brewing industry. We want all our teams to feel like the work they do supports our mission to protect the planet.”

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