RPT Realty (NYSE: RPT) surged in pre-market trading on Monday after the owner and operator of a national portfolio of shopping center destinations announced that it will be acquired by Kimco Realty (NYSE: KIM), another owner and operator of shopping centers. Kimco will acquire RPT Realty in an all-stock acquisition deal worth $2 billion, including the assumption of debt and preferred stock.
The deal is expected to close early next year. After the closing of the deal, Kimco expects to have a pro forma equity market capitalization of around $13 billion and a total enterprise value of around $22 billion. As a part of this deal, RPT stockholders will receive 0.6049 of a newly issued Kimco share for every RPT stock, representing a value of around $11.34 per RPT share. This price indicates a premium of 19% to RPT’s closing share price on August 25.
The combined company will be majorly (92%) owned by Kimco shareholders while the remaining 8% will be owned by RPT stockholders.
Conor Flynn, CEO of Kimco commented, “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 [funds from operations] 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.”
RPT stock has gained around 2.8% in the past year.