Kimco Realty® (“Kimco” or the “Company”) (NYSE: KIM), North
America’s largest publicly traded owner and operator of open-air,
grocery-anchored shopping centers and a growing portfolio of
mixed-use assets, and RPT Realty (“RPT”) (NYSE: RPT), a
publicly traded owner and operator of a national portfolio of
open-air shopping center destinations principally located in top
U.S. markets, today announced a definitive merger agreement under
which RPT will be acquired by Kimco in an all-stock transaction
valued at approximately $2 billion, including the assumption of
debt and preferred stock. Upon closing, Kimco expects to have a pro
forma equity market capitalization of approximately $13 billion and
a total enterprise value of approximately $22 billion.
Under the terms of the merger agreement, RPT
shareholders will receive 0.6049 of a newly-issued Kimco share for
each RPT share they own, representing a total consideration of
approximately $11.34 per RPT share based on Kimco’s closing share
price on August 25, 2023. This represents a 19% premium to RPT’s
closing share price on August 25, 2023. At closing, Kimco
stockholders and RPT shareholders are expected to own approximately
92% and 8% of the combined company, respectively. The board of
directors of Kimco and the board of trustees of RPT both
unanimously approved the transaction. The transaction is expected
to close in the beginning of 2024, subject to RPT shareholder
approval and other customary closing conditions.
“This transaction presents another exciting
opportunity for our Company to deepen our presence in key Coastal
and Sun Belt markets, while accelerating our growth at an
attractive valuation,” said Conor Flynn, CEO of Kimco.
“Approximately 70% of RPT’s portfolio aligns with our key strategic
markets. Furthermore, their substantial pipeline of signed, but not
yet open leases and 20% or greater mark-to-market leasing spread
across the portfolio, will drive higher growth for the combined
company. The transaction is immediately accretive to FFO and the
addition of these properties further positions Kimco as the
country’s premier owner and operator of open-air, grocery-anchored
shopping centers and mixed-use assets.”
Brian Harper, President and CEO of RPT, added,
“Since joining RPT five years ago, the team and I have worked
tirelessly to create long-term stakeholder value by curating the
portfolio towards Coastal and Sun Belt markets, while delivering
exceptional leasing results and prudently managing the balance
sheet. After carefully considering the merits of this transaction,
we believe that aligning with Kimco, a leader in the
grocery-anchored shopping center space, is in the best interest of
our stakeholders, given the multiple synergies that can be realized
as a combined company. We also believe this transaction delivers an
attractive share price premium that offers our shareholders the
opportunity to participate in a larger, more liquid and diversified
company that is well positioned to deliver long-term value.”
The transaction will add 56 open-air shopping
centers, including 43 wholly-owned and 13 joint venture assets,
comprising 13.3 million square feet of gross leasable area, to
Kimco’s existing portfolio of 528 properties. In addition, the
Company will acquire RPT’s 6% stake in a 49-property net lease
joint venture. Beyond strengthening Kimco’s presence in its key
markets, today’s transaction is expected to provide embedded growth
opportunities, including those associated with redevelopment. Kimco
has identified a limited group of Midwest properties within RPT’s
portfolio that it views as not consistent with its strategy that it
expects to divest over time.
Adam Gallistel, Head of Americas Real Estate for
GIC, said, “Our longstanding and successful joint venture with RPT
has provided GIC a unique opportunity to own high-quality,
grocery-anchored shopping centers with a distinguished
organization. We are thankful to Brian Harper and the entire RPT
team for many years of successful partnership. Looking ahead, we’re
excited to combine GIC's extensive history of real estate investing
with Kimco's deep expertise as a leading owner and operator of
open-air shopping centers and mixed-use assets in the U.S., to
continue delivering on the strong long-term opportunities in this
space."
Summary of Strategic
BenefitsThe acquisition is expected to result in a number
of benefits, including:
- Earnings
Accretion and Net Operating Income (NOI) Growth
Opportunities: The transaction is expected to be
immediately accretive to key financial and operating metrics,
including initial cost savings synergies of approximately $34
million. Kimco is well positioned to unlock embedded value in the
portfolio by increasing portfolio occupancy, marking leases to
market, realizing the 330-basis point spread in RPT’s existing
signed not open lease pipeline, and creating value through future
redevelopment opportunities to drive future NOI growth.
- Increased
Scale in High-Growth Target Markets: RPT’s assets that
align with Kimco’s key target markets are nearly 90%
grocery-anchored, based on pro-rata annual base rent, and provide a
strong NOI growth profile. These assets will further enhance
Kimco’s strategic presence in Sun Belt and Coastal markets that
benefit from positive demographic and migration trends. The
addition of Mary Brickell Village in Miami offers significant value
creation potential through leasing and tenant remerchandising,
mixed-use redevelopment, as well as expanding Kimco’s Signature
Series® portfolio.
- Expanded
Partnership Opportunities: RPT’s existing joint venture
relationships, the largest of which is GIC, a leading sovereign
wealth fund, provide significant opportunity for continued growth
via investments in grocery-anchored shopping centers and mixed-use
assets.
- Maintains
Balance Sheet Strength: The Company believes that the
transaction will be leverage neutral, preserving financial
flexibility and capacity to invest while creating additional
value.
Leadership and
OrganizationThere are no anticipated changes to Kimco’s
executive management team or board of directors. RPT is expected to
align the timing of its regular quarterly dividend payments to
Kimco’s during the pendency of the acquisition. The transaction is
generally expected to be non-taxable to shareholders of both
companies.
J.P. Morgan is acting as financial advisor and
Wachtell, Lipton, Rosen & Katz is acting as legal advisor to
Kimco. Lazard is acting as financial advisor and Goodwin Procter
LLP is acting as legal advisor to RPT. ICR, LLC is serving as
communications advisor to Kimco. Prosek Partners is serving as
communications advisor to RPT.
Presentation and Conference
CallThe companies will host a joint conference call on
August 28, 2023 at 8:30 AM ET to discuss the proposed transaction.
The conference call-in number is 1-877-704-4453 (Domestic) or
1-201-389-0920 (International), or interested parties can join the
live webcast of the conference call by accessing the Investor
Relations section of each company’s website at www.kimcorealty.com
or www.rptrealty.com.
A presentation providing additional details
about the transaction and replay of the conference call will be
posted when available on the respective companies’ websites under
the Investor Relations sections.
About Kimco RealtyKimco Realty®
(NYSE:KIM) is a real estate investment trust (REIT) headquartered
in Jericho, N.Y. that is North America’s largest publicly traded
owner and operator of open-air, grocery-anchored shopping centers
and a growing portfolio of mixed-use assets. The Company’s
portfolio is primarily located in the first-ring suburbs of the top
major metropolitan markets, including those in attractive coastal
markets and rapidly expanding Sun Belt cities, with a tenant mix
focused on essential, necessity-based goods and services that drive
multiple shopping trips per week. Kimco Realty is also committed to
leadership in environmental, social and governance (ESG) issues and
is a recognized industry leader in these areas. Publicly traded on
the NYSE since 1991, and included in the S&P 500 Index, the
Company has specialized in shopping center ownership, management,
acquisitions, and value enhancing redevelopment activities for more
than 60 years. As of June 30, 2023, the Company owned interests in
528 U.S. shopping centers and mixed-use assets comprising 90
million square feet of gross leasable space. For further
information, please visit www.kimcorealty.com.
About RPT RealtyRPT Realty owns
and operates a national portfolio of open-air shopping destinations
principally located in top U.S. markets. The company's shopping
centers offer diverse, locally-curated consumer experiences that
reflect the lifestyles of their surrounding communities and meet
the modern expectations of the company's retail partners. RPT is a
fully integrated and self-administered REIT publicly traded on the
New York Stock Exchange (the “NYSE”). The common shares of RPT, par
value $0.01 per share (the “common shares”) are listed and traded
on the NYSE under the ticker symbol “RPT”. As of June 30, 2023, the
company's property portfolio (the "aggregate portfolio") consisted
of 43 wholly-owned shopping centers, 13 shopping centers owned
through its grocery-anchored joint venture, and 49 retail
properties owned through its net lease joint venture, which
together represent 14.9 million square feet of gross leasable area
(“GLA”). As of June 30, 2023, RPT’s pro-rata share of the aggregate
portfolio was 93.2% leased. For additional information about the
company please visit www.rptrealty.com.
Forward Looking StatementsThis
communication contains certain “forward-looking” statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended (the “Securities Act”), and Section 21E of the Securities
Exchange Act of 1934, as amended. Kimco intends
such forward-looking statements to be covered by the
safe harbor provisions
for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995 and includes this
statement for purposes of complying with the safe harbor
provisions. Forward-looking statements, which are based on certain
assumptions and describe Kimco’s future plans, strategies and
expectations, are generally identifiable by use of the words
“believe,” “expect,” “intend,” “commit,” “anticipate,” “estimate,”
“project,” “will,” “target,” “plan”, “forecast” or similar
expressions. Forward-looking statements regarding Kimco and RPT,
include, but are not limited to, statements related to the
anticipated acquisition of RPT and the anticipated timing and
benefits thereof and other statements that are not historical
facts. These forward-looking statements are based on each of the
companies’ current plans, objectives, estimates, expectations and
intentions and inherently involve significant risks and
uncertainties. You should not rely on forward-looking statements
since they involve known and unknown risks, uncertainties and other
factors which, in some cases, are beyond Kimco’s and RPT’s control
and could materially affect actual results, performances or
achievements. Factors which may cause actual results to differ
materially from current expectations include, but are not limited
to, risks and uncertainties associated with: Kimco’s and RPT’s
ability to complete the proposed transaction on the proposed terms
or on the anticipated timeline, or at all, including risks and
uncertainties related to securing the necessary RPT shareholder
approval and satisfaction of other closing conditions to consummate
the proposed transaction; the occurrence of any event, change or
other circumstance that could give rise to the termination of the
definitive transaction agreement relating to the proposed
transaction; risks related to diverting the attention of Kimco and
RPT management from ongoing business operations; failure to realize
the expected benefits of the proposed transaction; significant
transaction costs and/or unknown or inestimable liabilities; the
risk of shareholder litigation in connection with the proposed
transaction, including resulting expense or delay; the ability to
successfully integrate the operations of Kimco and RPT following
the closing of the transaction and the risk that such integration
may be more difficult, time-consuming or costly than expected;
risks related to future opportunities and plans for the combined
company, including the uncertainty of expected future financial
performance and results of the combined company following
completion of the proposed transaction; effects relating to the
announcement of the proposed transaction or any further
announcements or the consummation of the proposed transaction on
the market price of Kimco’s common stock or RPT’s common shares or
on each company’s respective relationships with tenants, employees
and third-parties; the ability to attract, retain and motivate key
personnel; the possibility that, if Kimco does not achieve the
perceived benefits of the proposed transaction as rapidly or to the
extent anticipated by financial analysts or investors, the market
price of Kimco’s common stock could decline; general adverse
economic and local real estate conditions; the impact of
competition; the inability of major tenants to continue paying
their rent obligations due to bankruptcy, insolvency or a general
downturn in their business; the reduction in income in the event of
multiple lease terminations by tenants or a failure of multiple
tenants to occupy their premises in a shopping center; the
potential impact of e-commerce and other changes in consumer buying
practices, and changing trends in the retail industry and
perceptions by retailers or shoppers, including safety and
convenience; the availability of suitable acquisition, disposition,
development and redevelopment opportunities, the costs associated
with purchasing and maintaining assets and risks related to
acquisitions not performing in accordance with our expectations;
the ability to raise capital by selling assets; disruptions and
increases in operating costs due to inflation and supply chain
issues; risks associated with the development of mixed-use
commercial properties, including risks associated with the
development, and ownership of non-retail real estate; changes in
governmental laws and regulations, including, but not limited to
changes in data privacy, environmental (including climate change),
safety and health laws, and management’s ability to estimate the
impact of such changes; valuation and risks related to joint
venture and preferred equity investments and other investments;
valuation of marketable securities and other investments, including
the shares of Albertsons Companies, Inc. common stock held by
Kimco; impairment charges; criminal cybersecurity attacks
disruption, data loss or other security incidents and breaches;
impact of natural disasters and weather and climate-related events;
pandemics or other health crises, such as COVID-19; the ability to
attract, retain and motivate key personnel; financing risks, such
as the inability to obtain equity, debt or other sources of
financing or refinancing on favorable terms or at all; the level
and volatility of interest rates and management’s ability to
estimate the impact thereof; changes in the dividend policy for
Kimco’s common and preferred stock and Kimco’s ability to pay
dividends at current levels; unanticipated changes in the intention
or ability to prepay certain debt prior to maturity and/or hold
certain securities until maturity; Kimco’s and RPT’s ability to
continue to maintain their respective status as a REIT for United
States federal income tax purposes and potential risks and
uncertainties in connection with their respective UPREIT structure;
and the other risks and uncertainties affecting Kimco and RPT,
including those described from time to time under the caption “Risk
Factors” and elsewhere in Kimco’s and RPT’s Securities and Exchange
Commission (“SEC”) filings and reports, including Kimco’s Annual
Report on Form 10-K for the year ended December 31, 2022, RPT’s
Annual Report on Form 10-K for the year ended December 31, 2022,
and future filings and reports by either company. Moreover, other
risks and uncertainties of which Kimco or RPT are not currently
aware may also affect each of the companies’ forward-looking
statements and may cause actual results and the timing of events to
differ materially from those anticipated. The forward-looking
statements made in this communication are made only as of the date
hereof or as of the dates indicated in the forward-looking
statements, even if they are subsequently made available by Kimco
or RPT on their respective websites or otherwise. Neither Kimco nor
RPT undertakes any obligation to update or supplement any
forward-looking statements to reflect actual results, new
information, future events, changes in its expectations or other
circumstances that exist after the date as of which the
forward-looking statements were made.
Important Additional Information and
Where to Find ItIn connection with the proposed
transaction, Kimco will file with the SEC a registration statement
on Form S-4 to register the shares of Kimco common stock to be
issued in connection with the proposed transaction. The
registration statement will include a proxy statement/prospectus
which will be sent to the shareholders of RPT seeking their
approval of their respective transaction-related proposals.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION
STATEMENT ON FORM S-4 AND THE RELATED PROXY STATEMENT/PROSPECTUS,
AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS AND ANY
OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION
WITH THE PROPOSED TRANSACTION, WHEN THEY BECOME AVAILABLE, BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT KIMCO, RPT AND THE
PROPOSED TRANSACTION.
Investors and security holders may obtain copies
of these documents free of charge through the website maintained by
the SEC at www.sec.gov or from Kimco at its website,
kimcorealty.com, or from RPT at its website, rptrealty.com.
Documents filed with the SEC by Kimco will be available free of
charge by accessing Kimco’s website at kimcorealty.com under the
heading Investors or, alternatively, by directing a request to
Kimco at IR@kimcorealty.com or 500 North Broadway Suite 201,
Jericho, New York 11753, telephone: (866) 831-4297, and documents
filed with the SEC by RPT will be available free of charge by
accessing RPT’s website at rptrealty.com under the heading
Investors or, alternatively, by directing a request to RPT at
invest@rptrealty.com or 19 West 44th Street, Suite 1002, New York,
NY 10036, telephone: (516) 869-9000.
Participants in the
SolicitationKimco and RPT and certain of their respective
directors, trustees and executive officers and other members of
management and employees may be deemed to be participants in the
solicitation of proxies from the shareholders of RPT in respect of
the proposed transaction under the rules of the SEC. Information
about Kimco’s directors and executive officers is available in
Kimco’s proxy statement dated March 15, 2023 for its 2023 Annual
Meeting of Stockholders. Information about RPT’s trustees and
executive officers is available in RPT’s proxy statement dated
March 16, 2023 for its 2023 Annual Meeting of Shareholders. Other
information regarding the participants in the proxy solicitation
and a description of their direct and indirect interests, by
security holdings or otherwise, will be contained in the proxy
statement/prospectus and other relevant materials to be filed with
the SEC regarding the proposed transaction when they become
available. Investors should read the proxy statement/prospectus
carefully when it becomes available before making any voting or
investment decisions. You may obtain free copies of these documents
from Kimco or RPT using the sources indicated above.
No Offer or SolicitationThis
communication shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be
any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities
Act.
CONTACT:David F. BujnickiSenior
Vice President, Investor Relations and StrategyKimco Realty
Corporation1-866-831-4297dbujnicki@kimcorealty.com
Vin ChaoManaging Director - FinanceRPT
Realty1-212-221-1752vchao@rptrealty.com
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