Kimco Realty Corporation, a prominent real estate investment trust (REIT) focused on open-air retail centers, has announced its intention to acquire RPT Realty in a stock transaction valued at $2 billion, including debt and preferred stock assumption. The acquisition is aimed at strengthening Kimco’s presence in key markets and accelerating its growth at an appealing valuation.
Upon completion of the deal, Kimco’s pro forma equity market capitalization is projected to reach $13 billion, with a total enterprise value of $22 billion. The transaction has been priced at $11.34 per RPT share, reflecting a 19% premium to RPT’s closing share price on August 25, 2023, and is expected to close in early 2024, pending RPT shareholder approval and customary closing conditions.
Both Kimco Realty and RPT Realty specialize in open-air retail centers, with Kimco’s focus primarily on grocery-anchored centers and mixed-use destinations. The acquisition of RPT Realty will not only deepen Kimco’s presence in key Coastal and Sun Belt markets but also enhance growth opportunities for the combined entity.
The transaction will add 56 open-air shopping centers to Kimco’s portfolio, comprising 13.3 million square feet of gross leasable area. Additionally, Kimco will acquire RPT’s 6% stake in a 49-property net lease joint venture. The deal aligns with Kimco’s strategy to expand its market presence and benefit from RPT’s existing joint venture relationships, particularly with major partner GIC, a sovereign wealth fund.
Conor Flynn, CEO of Kimco, highlighted the strategic significance of the acquisition, stating that approximately 70% of RPT’s portfolio aligns with Kimco’s key markets, and the robust pipeline of signed but unopened leases and attractive leasing spreads are expected to drive growth for the combined company.
Kimco’s financial advisor for the transaction is J.P. Morgan, while Wachtell, Lipton, Rosen & Katz is serving as its legal advisor. RPT has enlisted Lazard as its financial advisor and Goodwin Procter LLP as its legal advisor for the deal. Communication advisory services are being provided by ICR, LLC for Kimco and Prosek Partners for RPT.