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Shaftesbury, Capco Discuss Merger to Create London-Focused REIT

  • Norges Bank would support proposed deal; details being fixed
  • Combination would be big in West End, home to tourist spots
Diners on the terrace of an outdoor restaurant in the Covent Garden district of London, U.K.

Diners on the terrace of an outdoor restaurant in the Covent Garden district of London, U.K.

Photographer: Jason Alden/Bloomberg
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Shaftesbury Plc and Capital & Counties Properties Plc are in advanced talks to create a real estate group with assets in some of London’s hottest spots, including Covent Garden and Chinatown.

Norway’s sovereign wealth fund, a major investor in both companies, signaled its support for the all-stock deal, terms of which remain under discussion, the companies said in a joint statement late Saturday. Shaftesbury would own 53% and Ian Hawksworth, chief executive officer of Capco, would continue in the same role at the combined real estate investment trust, which could be worth about 3.6 billion pounds ($4.5 billion) based on current market values.