In a statement, the companies said Shaftesbury would own 53% and Capco shareholders would have the remaining 47% in a deal structured as an acquisition of Shaftesbury by Capco.
Capco currently holds a 25% stake in Shaftsbury, which it acquired back in June 2020.
The possible all-share merger would create a real estate investment trust focused on London’s West End with a portfolio of c.2.9 million sq ft of lettable space located in high-profile destinations including Covent Garden, Carnaby, Chinatown and Soho.
This includes c.1.8 million sq ft of retail and hospitality space, together with c.1.1 million sq ft of office and residential accommodation.
The trust would be led by Capco boss Ian Hawksworth and chaired by Jonathan Nicholls, chair of Shaftesbury.
Brian Bickell, who has been CEO of Shaftesbury for 11 years, would retire on completion of the merger.
Norway’s sovereign wealth fund, a shareholder in both firms, signalled its support for the merger.
Capco is being advised by bankers at Rothschild, while Blackdown Partners and Evercore Partners are advising Shaftesbury.