Kimco Realty to acquire RPT Realty in $2bn all-stock deal

Kimco Realty is acquiring smaller NYSE-listed grocery-anchored shopping centre owner RPT Realty for $2bn (€1.8bn).

Kimco said it is buying RPT in an all-stock transaction, including the assumption of debt and preferred stock.

The deal involves RPT shareholders receiving 0.6049 of a newly-issued Kimco share for each RPT share they own, representing a 19% premium to RPT’s closing share price on 25 August.

At closing, Kimco stockholders and RPT shareholders are expected to own approximately 92% and 8% of the combined company, respectively.

Once the deal is completed, Kimco said it expects to have a pro forma equity market capitalisation of $13bn and a total enterprise value of around $22bn.

Kimco, which owns a portfolio of mixed-use assets, is North America’s largest publicly traded owner and operator of open-air, grocery-anchored shopping centres. RPT owns a portfolio of open-air shopping centre destinations principally located in top US markets.

The transaction will add 56 open-air shopping centres, including 43 wholly-owned and 13 joint venture assets, comprising 13.3m sqft of gross leasable area, to Kimco’s existing portfolio of 528 properties.

In addition, Kimco will acquire RPT’s 6% stake in a 49-property net lease joint venture with Singapore’s GIC.

Conor Flynn, CEO of Kimco, said: “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.

“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.”

Brian Harper, president and CEO of RPT, said: “After carefully considering the merits of this transaction, we believe that aligning with Kimco, a leader in the grocery-anchored shopping centre space, is in the best interest of our stakeholders, given the multiple synergies that can be realised 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.”

To read the latest edition of the latest IPE Real Assets magazine click here.