Kimco Realty Acquires RPT In Stock Deal Valued at $2B

Kimco Realty is acquiring RPT Realty in a stock transaction that has been valued at $2 billion including the assumption of debt and preferred stock. Upon closing, Kimco expects to have a pro forma equity market capitalization of $13 billion and a total enterprise value of $22 billion. The deal has been priced at $11.34 per RPT share based on Kimco’s closing share price on August 25, 2023, representing a 19% premium to RPT’s closing share price on August 25, 2023.’

The board of directors of Kimco and the board of trustees of RPT both unanimously approved the transaction, which is expected to close in the beginning of 2024, subject to RPT shareholder approval and other customary closing conditions.

Both companies focus on open-air retail centers with Kimco zeroing in on grocery-anchored centers and an increasing number of mixed use destinations. The RPT acquisition will “deepen our presence in key Coastal and Sun Belt markets, while accelerating our growth at an attractive valuation,” said Conor Flynn, CEO of Kimco, in prepared remarks. “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 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. Kimco has also identified a limited group of Midwest properties within RPT’s portfolio that it expects to divest over time.’

The company also notes that RPT’s existing joint venture relationships, the largest of which is GIC, “provide significant opportunity for continued growth via investments in grocery-anchored shopping centers and mixed-use assets.”

Adam Gallistel, head of Americas Real Estate for GIC, said in prepared remarks that the sovereign wealth funds plans to continue this relationship with Kimco.

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.