In a statement British real estate firms Capital & Counties Properties along with Shaftesbury Plc said, they are in advanced talks on a merger.
In the potential merger, Shaftesbury would own 53% and Capco shareholders would own the remainder in a deal structured as an acquisition of Shaftesbury by Capco, said both companies.
They did not provide a value for the potential deal.
According to a report from Sky News, the merged businesses would have a valuation of $4.3 billion (3.5 billion pounds).
According to both companies, the merger would create a real estate investment trust focussed on London’s West End with a portfolio of some 2.9 million square feet (270,000 square metres) “in high-profile destinations including Covent Garden, Carnaby, Chinatown and Soho”.
Norway’s sovereign wealth fund, which has a stake in both companies, has signalled its support for the potential merger.
The real estate trust would be led by Capco boss Ian Hawksworth and chaired by Jonathan Nicholls, chair of Shaftesbury, said the companies. Brian Bickell, who has been CEO of Shaftesbury for 11 years, would retire on completion of the merger.
Evercore and Blackdown Partners are advising the Shaftesbury board, and Rothschild & Co is advising Capco, said both companies in a statement.
($1 = 0.8106 pounds)