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Kimco Realty to buy competitor Weingarten Realty for $3.87 billion

By Ishika Dangayach on Apr 15, 2021 | 04:35 AM IST

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Kimco Realty Corp, the owner of the shopping center, said on Thursday it would buy competitor Weingarten Realty Investors for about $3.87 billion, contributing a lot to its operations as US economic recovery has increased and governments have loosened business and trade restrictions.

Under the terms of the merger agreement, each common share of Weingarten will be converted into 1.408 new shares of Kimco common stock plus $2,89 in cash. This amounts to a total of approximately $30.32 for each Weingarten share based on the closing stock price of Kimco on April 14, 2021.

Kimco, based in Jericho, New York said that the Kimco shareholders own around 71% of the joint venture, and the Weingarten shareholders are expected to have around 29%.

The Jericho-based company said the combined company will have approximately $12 billion Pro-forma equity market capitalization and a total Pro-forma value of approximately $20.5 billion.

The parties anticipate that the deal will close in the second half of 2021.

The acquisition would create a nationwide operating portfolio of 559 open-air grocers and mixed properties with a total leasable area of around 100 million square feet. These assets are located mainly in the United States' largest metropolises.

The acquisition between these two real-estate investment trusts demonstrates how the move to the Sunbelt shows no signs of slowing down, according to Alexander Goldfarb and Daniel Santos, analysts at Piper Sandler Cos. Weingarten's properties in cities such as Houston, Miami, Orlando, Fla., and Phoenix will enhance Kimco's footprint in the area, which has recently seen an influx of people. The analysts added that competition is not expected, WSJ reported.

The addition of Weingarten's 159 high-quality, open-air grocery-anchored shopping centers and mixed-use properties advances Kimco's policy of supplying tenants and customers with more last-mile fulfillment opportunities.

The top ten tenants of the merged group are essential, industry-leading grocers such as Kroger, Whole Foods, and Walmart, as well as best-in-class supermarkets such as TJX, Ross Stores, and Burlington.

The number of directors on Kimco's Board of Directors will be increased to nine, with one member of Weingarten's current Board of Trust Managers added to the Kimco Board. Milton Cooper will continue to serve as Executive Chairman, Mary Hogan Preusse to work as Lead Independent Director of the merger company while Conor Flynn will act as Chief Executive Officer of the company.

Following the merger, the company's headquarters will remain in Jericho, New York. The corporation will keep the Kimco name and will operate under the ticker mark KIMS (NYSE)

Kimco's financial advisers are Barclays and Lazard, and its legal counsel is Wachtell, Lipton, Rosen & Katz. Weingarten's exclusive financial adviser is J.P. Morgan, and its legal advisor is Dentons.

Picture Credits: WSJ 

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