MART shareholders will receive cash consideration of $21.051 per share. In addition, more than 99% of the limited partners in MART's operating partnership elected to have their partnership units redeemed for cash consideration equal to $21.051 per unit.
In accordance with the merger agreement, Kimco's Board of Directors has appointed F. Patrick Hughes, who served as CEO, president and trustee of MART since its 1993 formation, to serve on its board.
The transaction has a total value of approximately $700 million including MART's existing indebtedness, which as of September 30, was approximately $233 million. A new $400 million credit facility provided additional financing for the transaction.
MART owns equity interests in 41 operating shopping centers, 36 of which are wholly owned and four of which are under redevelopment or expansion. The properties have a gross leasable area of approximately 4.7 million sf of which approximately 95% of the stabilized square footage is currently leased. Additionally, MART has three shopping centers under development with a total estimated at 183,500 sf and other commercial assets totaling approximately 856,000 sf. MART also owns approximately 80 acres of undeveloped land. MART's properties are located primarily in the states of Maryland, Virginia, New York, Pennsylvania, Massachusetts and Delaware, which will strengthen Kimco's presence in these states where it currently owns interests in 114 properties.
Kimco has tentative agreements for a number of the properties to be allocated to its strategic co-investment programs. Kimco officials say these programs benefit from a lower cost of capital and should produce strong investment returns while further expanding Kimco's investment and property management business. Selected non-core assets will be immediately marketed for sale.
"We will evaluate each property and allocate them to Kimco's strategic co-investment programs, perhaps even creating new ones," said Kimco chairman and CEO Milton Cooper when announcing the merger "This fits well with our strategy of growing our management business and generating solid investment returns for our partners while conserving our own equity capital."
UBS Securities LLC acted as financial advisor to Kimco.Wachovia Securities LLC acted as financial advisor to MART. Goodwin Procter LLP acted as legal counsel to Kimco. Gordon, Feinblatt LLC of Baltimore and Hunton & Williams LLP acted as legal counsel to MART.
Initial funding for the transaction will be provided by Kimco's $500 million revolving credit facility or other interim loan facilities. At the beginning of June, Kimco obtained a new $500 million revolving line of credit, expandable up to $600 million, to replace its existing $250 million revolving facility, which was scheduled to expire in August 2003. Eighteen banks are participating in the facility, which will be used for general corporate purposes.
Kimco, a publicly-traded REIT, has specialized in shopping center acquisitions, development and management for more than 35 years. Kimco owns and operates the nation's largest portfolio of neighborhood and community shopping centers with interests in 675 properties comprising approximately 99.0 million sf of leasable space.
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