11th Nov 2005 07:29
Shaftesbury PLC11 November 2005 11 November 2005 Shaftesbury PLC For immediate release Proposed joint venture with the Mercers' Company Shaftesbury PLC ("Shaftesbury" or the "Company") announces that it has agreed,subject to shareholder approval, to establish a joint venture (the "JV") withthe Mercers' Company. Shaftesbury and the Mercers' Company (together the "JVPartners") will each contribute assets worth £81.14 million and will each own50% of the JV. The leases to be owned by the JV have been valued at £118.47million. Shaftesbury will be appointed as project manager and will bring to theproject its specialist experience of regeneration in London's West End. Reason for the Transaction The JV Partners own adjacent freeholds and leaseholds which together form almostthe whole of an island site extending to approximately 1.92 acres on the westernedge of Covent Garden. The combined island site has frontages to Long Acre,Upper St.Martin's Lane, Shelton Street and Mercer Street. The existing buildingshave a total net area of approximately 246,000 sq.ft. of which offices and carparking currently account for approximately 60%. The combination of the properties will allow the phased reconfiguration andrefurbishment of the entire site. Current plans, which are subject to obtainingthe necessary planning consents, envisage the creation of additional retail andleisure space with new pedestrian routes through the site, and improved qualityof office and residential accommodation. These changes are expected to generateadditional rental income and capital value over the medium and long term. The JV Partners currently envisage that the phased reconfiguration andrefurbishment of the site will take about seven years. Summary of terms of the JV Agreement Shaftesbury will contribute properties worth £38.82 million, and £42.32 millionin cash, for 50 per cent. of the shares in the JV. The Mercers' Company willcontribute properties valued at £81.14 million for 50 per cent. of the shares inthe JV. Shaftesbury will sell to the Mercers' Company its freehold and leaseholdreversionary interests in the properties being contributed to the JV for £3.67million. The JV Partners will enter into a property management agreement under whichShaftesbury will provide strategic asset management advice and administrativeservices in relation to the JV properties. The Company will receive a fee forthese services initially set at £650,000 per annum. The JV Agreement requires the JV Partners to provide such funding as isnecessary to carry out the business plan which will be reviewed by the JVPartners on an annual basis. At present, the JV Partners do not envisage raisingany external finance. Commenting on the announcement, Jonathan Lane, Chief Executive of Shaftesburysaid, "We are pleased to establish this joint venture with The Mercers' Company whoshare our long term investment strategy. The combination of our adjoiningownerships in Covent Garden, harnessing our proven experience with mixed useWest End schemes, offers exciting opportunities to increase income and valuesover the medium and long term. Each partner's neighbouring holdings should alsobenefit from this project." Michael Soames, The Surveyor to the Mercers' Company, said, "The Mercers' Company have owned these properties for several hundred years andwe are delighted to be working with Shaftesbury on the exciting regeneration ofthis area of Covent Garden as well as re-acquiring the freeholds of the rest ofthe block." Extraordinary General Meeting Completion of the JV Agreement is conditional, inter alia, on Shaftesburyshareholders' approval being obtained at the Extraordinary General Meeting ("EGM") to be held at Lovells, Atlantic House, Holborn Viaduct, London EC1A 2FG at 10:00am on 29 November 2005. A circular and notice convening the EGM will beposted to the Company's shareholders shortly. Two copies of the circular and notice convening the EGM will be submitted to theFinancial Services Authority and made available for inspection at the DocumentViewing Facility, which is situated at: Financial Services Authority25 The North ColonnadeCanary WharfLondon E15 5HS For further information contact: Shaftesbury PLC 020-7333-8118Jonathan Lane, Chief ExecutiveBrian Bickell, Finance Director www.shaftesbury.co.uk JPMorgan Cazenove 020-7588-2828Richard CottonRoger Clarke cityPROFILE 020-7448-3244Simon Courtenay The Mercers' Company 020-7767-7232Michael Soames, The Surveyor Notes to editors: Information on Shaftesbury Shaftesbury's strategy is to invest only in the centre of London's West End withthe aim of assembling clusters of buildings or "villages" where there is anopportunity to create rental growth. It invests only in districts in the WestEnd which in its experience have an enduring demand for occupiers and popularitywith their customers. At 30 September 2004, Shaftesbury's portfolio included 275 shops, 133restaurants, bars and clubs, 459,000 sq.ft of offices and 220 flats andmaisonettes. The portfolio comprises over 350 buildings with more than 800tenants and contains a wide range of unit sizes and uses. Shaftesbury currently has three principal villages. The Carnaby villagecomprises ten streets centred on the world famous Carnaby Street. UnderShaftesbury's ownership, Carnaby has established a reputation with bothretailers and shoppers as the leading location in the West End for innovativefashion retailing complemented by a variety of bars and restaurants. The CoventGarden village, centred on Seven Dials, is focussed on distinctive brands andindividual restaurants. Shaftesbury's third village is located in Chinatown,positioned close to the capital's premier cinemas in Leicester Square and over40 theatres. Chinatown is noted for its concentration of restaurants offering awide variety of oriental cuisine and other leisure related businesses. Information on the Mercers' Company The Mercers' Company is the premier livery company in the City of London and wasincorporated by Royal Charter in 1394. The Mercers' Company have subsequentlybeen granted several further charters, the most recent being obtained fromEdward VIII in 1936 in order to extend the Mercers' Company's power with regardto corporate property. The Mercers' Company has over 300 members and isgoverned by its Court of Assistants. Over the centuries the Mercers' Company's active links with trade have ceased.The Mercers' Company controls a number of charitable trusts whose activitiesinclude the provision of schools, housing for older people and church patronage.The Mercers' Company has a grant-making programme which distributes grantsfrom the charitable trusts under its control within the fields of welfare foryouth and the community, education, the advancement of the Christian religionand heritage and arts. The Mercers' Company's corporate activities include the ownership and managementof a portfolio of investments, consisting mainly of properties in the City andWest End of London. The Covent Garden estate comprises property to the north ofLong Acre and includes shops, cultural spaces, offices and residential flats.The surplus from the Mercers' Company's corporate activities is used to fund itscharitable grant making. JPMorgan Cazenove, which is regulated in the United Kingdom for the conduct ofinvestment business by the Financial Services Authority, is acting exclusivelyfor Shaftesbury and no one else in connection with this announcement and thematters described in this announcement. JPMorgan Cazenove will not beresponsible to anyone other than Shaftesbury for providing the protectionsafforded to customers of JPMorgan Cazenove nor for providing advice in relationto this announcement or any other matters referred to in this announcement. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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