Capco mulls demerger

Covent Garden estate to be floated as separate listed company

Capital & Counties Properties has confirmed it is considering a demerger, which would result in two separately-listed businesses based around its prime central London estates, each with its own distinct investment prospects.

Covent Garden, the world-class destination in the heart of central London, independently valued at over £2.5bn at 31 December 2017, will be launched as an independent, prime central London retail-focused REIT, led by Ian Hawksworth

The rest of the company will become a London development company centred around the Earls Court masterplan, which represents one of the most important large scale strategic opportunity areas in central London, led by Gary Yardley. Capco’s interest in the Earls Court scheme was independently valued at £759m at 31 December 2017.

It is currently expected that a demerger, if pursued, would be formalised by the end of this year.

In a Stock Exchange announcement Capco said: “The board has taken into account the changing income profile and scale of the Covent Garden business together with the completion of the final phase of demolition at Earls Court, and believes that separation of the two estates into independent businesses would now generate a number of benefits, including :

  • Enhancing the strategic flexibility of the two businesses going forward; and
  • The opportunity for investors to continue to participate in both businesses, which have distinct risk and reward profiles and capital requirements, enabling each business to attract the most appropriate shareholder base to support its own strategic development.

Chief Executive Ian Hawksworth said: “Capco has achieved significant growth since listing, driving value creation from its two prime central London estates, both of which have positive long-term growth prospects. Underpinned by a strong balance sheet, Capco is well-positioned to support the current capital requirements of both of its prime assets. Against this backdrop, the board believes the time is right to consider the structure of the business in order to realise the potential of these unique assets and enhance shareholder value.”

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