Prime Retail Rejects $66M Buyout

BALTIMORE, MD-Struggling shopping outlet REIT Prime Retail Inc. has rejected an unsolicited offer to be bought out by New York-based Fortress Investment Group LLC for $66.2 million. Dutiful consideration of the June 4 recapitalization proposal led Prime Retail officials and advisors to conclude that the bid was “inadequate.”

Real estate investment and asset management company Fortess had proposed buying up Prime Retail’s outstanding capital for twenty cents per-share to $8.00 per-share, depending on the class of the stock. The deal would have given Fortress a 31% stake in the REIT’s remaining 40 shopping centers, which account for approximately 11.3 million sf. The deal also provided for the raising of $50 million through a rights-offering that would have allowed debt-burdened Prime Retail to apply funds to the outstanding $33.2 million on its mezzanine loan, of which a Fortress affiliate is half owner.