A takeover bid was one of the great hopes to revive the slumbering Shaftesbury share price. The proposed merger with London West End peer Capital & Counties seems unlikely to catalyse a re-rating in the shares or invite future approaches for the enlarged Shaftesbury Capital. A clean break rather than an all-share merger would be far more desirable for Shaftesbury shareholders.
Under the terms of the deal, Shaftesbury shareholders would receive 3.356 new Capital & Counties shares for each Shaftesbury share they hold. Ownership of the new company would be split 53/47 between Shaftesbury and Capco.
The economics of the deal, structured as a takeover of Shaftesbury owing to Capco’s existing 25 per cent stake in the company, are hardly alluring for the former’s shareholders.
