– Expected to Be Immediately Accretive to Funds
From Operations (“FFO”) and Leverage Neutral Upon Closing –
– Provides Multiple Future Growth and Value
Creation Opportunities –
– Assets Complement Kimco’s High-Quality,
First-Ring Suburban Grocery-Anchored & Mixed-Use Shopping
Center Portfolio in Major Sun Belt & Coastal Markets –
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 Benefits
The 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 Organization
There 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 Call
The 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 Realty
Kimco 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 Realty
RPT 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 Statements
This 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 It
In 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 Solicitation
Kimco 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 Solicitation
This 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230828049099/en/
David F. Bujnicki Senior Vice President, Investor Relations and
Strategy Kimco Realty Corporation 1-866-831-4297
dbujnicki@kimcorealty.com
Vin Chao Managing Director - Finance RPT Realty 1-212-221-1752
vchao@rptrealty.com
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