Creates Industry-Leading Open-Air,
Grocery-Anchored Shopping Center and Mixed-Use Platform
Strengthens High-Quality Portfolio in Growth
Sun Belt Markets and Enhances Future Value Creation
Opportunities
Expected to be Immediately Accretive to Key
Earnings Metrics While Deleveraging Balance Sheet
With an Enterprise Value in Excess of $20
Billion, Combined Company to Benefit From Increased Scale and
Diversification
Kimco Realty Corp. (NYSE: KIM), one of North America’s largest
publicly traded owners and operators of open-air, grocery-anchored
shopping centers and mixed-use assets, and Weingarten Realty
Investors (NYSE: WRI), a grocery-anchored Sun Belt shopping center
owner, manager and developer, today announced that they have
entered into a definitive merger agreement under which Weingarten
will merge with and into Kimco, with Kimco continuing as the
surviving public company. The transaction brings together two
industry-leading retail real estate platforms with highly
complementary portfolios, creating the preeminent open-air shopping
center and mixed-use real estate owner in the country. The
increased scale in targeted growth markets, coupled with a broader
pipeline of redevelopment opportunities, positions the company to
create significant value for its shareholders. The combined company
is expected to have a pro forma equity market capitalization of
approximately $12.0 billion and a pro forma total enterprise value
of approximately $20.5 billion.
Under the terms of the merger agreement, each Weingarten common
share will be converted into 1.408 newly issued shares of Kimco
common stock plus $2.89 in cash. Based on the closing stock price
for Kimco on April 14, 2021, this represents a total consideration
of approximately $30.32 per Weingarten share. On a pro forma basis,
following the closing of the transaction, Kimco shareholders are
expected to own approximately 71% of the combined company’s equity,
and Weingarten shareholders are expected to own approximately 29%.
The parties currently expect the transaction to close during the
second half of 2021, subject to customary closing conditions,
including the approval of both Kimco and Weingarten shareholders.
This strategic transaction was unanimously approved by the Board of
Directors of Kimco and the Board of Trust Managers of
Weingarten.
The merger will create a national operating portfolio of 559
open-air grocery-anchored shopping centers and mixed-use assets
comprising approximately 100 million square feet of gross leasable
area. These properties are primarily concentrated in the top major
metropolitan markets in the United States. The combined company is
expected to benefit from increased scale and density in key Sun
Belt markets, enhanced asset quality, tenant diversity, a larger
redevelopment pipeline and a deleveraged balance sheet. As a
result, the combined company should be uniquely positioned to drive
further sustained growth in net operating income (NOI) and asset
value creation through continued strategic leasing and asset
management.
“This business combination is highly strategic, creating a
stronger platform that is even more capable of delivering long-term
growth and value creation,” said Conor Flynn, Kimco’s Chief
Executive Officer. “Not only will the merged company and its
shareholders enjoy a larger, higher quality, more diversified
portfolio with significant embedded growth opportunities, the
transaction also reduces the combined company’s leverage, creating
a stronger financial profile. This combination reflects our
conviction in the grocery-anchored shopping center category, which
has performed well throughout the pandemic and provides last mile
locations that are more valuable than ever due to their hybrid role
as both shopping destinations and omnichannel fulfillment
epicenters. It also gives us even greater density in the Sun Belt
markets we are targeting as well as visibility into the trends
shaping necessity-based retail.”
Andrew “Drew” Alexander, Chairman, President and Chief Executive
Officer of Weingarten, stated, “Combining these highly
complementary platforms is a win-win for shareholders of both
companies. After examining the deal from every angle, it became
increasingly clear that the potential of the integrated business is
much greater than the sum of its parts. The combined company’s
increased size and scale, together with its financial strength,
should drive an advantageous cost of capital, allowing the combined
company to more readily pursue value creation opportunities. We are
excited to deliver this transaction to our shareholders, who will
realize compelling and immediate value while also benefiting from
the upside potential associated with owning the industry’s
preeminent open-air shopping center and mixed-use REIT.”
Summary of Strategic Benefits
The merger of Kimco and Weingarten is expected to create a
number of operational and financial benefits, including:
- Enhanced Asset Diversification and Quality: Adding
Weingarten’s collection of 159 high-quality, open-air
grocery-anchored shopping centers and mixed-use properties advances
Kimco’ strategy of providing tenants and shoppers with greater
last-mile fulfillment opportunities.
- Expanded Geographic Reach in High-Growth, First-Ring Suburbs
of Core Markets: The transaction will grow Kimco’s presence in
strategic Sun Belt markets such as Houston, Miami, Phoenix, Atlanta
and Orlando, boasting positive demographic and migration trends
along with strong growth prospects. The Sun Belt and
high-barrier-to-entry top coastal markets will represent more than
82% of the combined company’s total annualized base rent
(ABR).
- Greater Tenant Diversity: The combined company’s top ten
tenants are essential, industry-leading grocers such as Kroger,
Whole Foods and Walmart and best-in-class retailers such as TJX,
Ross Stores and Burlington. These brands will represent
approximately 19.3% of total ABR, with no single tenant
representing more than approximately 4%.
- Compelling Value Creation Pipeline: The combination of
Weingarten’s largely funded and de-risked development pipeline,
together with Kimco’s significant redevelopment projects and
entitlements embedded in its existing portfolio, present compelling
future growth opportunities. Most of these projects are located in
markets where Kimco has an existing presence.
- Substantial Operational Savings and Corporate Synergies:
The combined company is expected to realize annualized cost
synergies of $35 to $38 million on a GAAP basis (excluding
accounting adjustments) and $31 to $34 million on a cash basis.
These expected savings are attributable to both companies’
complementary business operations and significant regional overlap
in high-growth Sun Belt markets where economies of scale can be
realized. These synergies are expected to be substantially realized
in the first full fiscal year post completion of the
transaction.
- Earnings Accretion and NOI Growth Opportunities: Upon
closing, the transaction is expected to be immediately accretive to
earnings metrics. The combined company is also well positioned to
increase cash flow at the property level by marking rents to market
rates, realizing contractual rent increases, re-merchandising,
growing portfolio occupancy and pursuing new value creation
opportunities.
- Increased Financial Strength and Flexibility: The
business combination will further strengthen Kimco’s balance sheet
by reducing net debt plus preferred to EBITDA. As a larger, lower
leveraged company, Kimco is expected to have more cost-effective
access to capital and benefit from earnings enhancement as existing
debt matures in the coming years. This improved credit profile and
greater liquidity put Kimco on a path toward potential future
credit ratings upgrades.
Leadership and Organization
The combined company is committed to retaining a strong, highly
qualified and diverse Board that has the requisite skills,
knowledge and experience to oversee the company and its long-term
strategic growth and performance. The number of directors on
Kimco’s Board of Directors will be expanded to nine, with one
member of the existing Board of Trust Managers of Weingarten to be
appointed to the Kimco Board. Milton Cooper will continue to serve
as Executive Chairman of the Board of Directors of the combined
company. Mary Hogan Preusse will continue to serve as Lead
Independent Director for the combined company.
The Kimco management team will lead the combined company, with
Conor Flynn as Chief Executive Officer, Ross Cooper as President
and Chief Investment Officer, David Jamieson as Chief Operating
Officer and Glenn G. Cohen as Chief Financial Officer. The approach
to integration planning will draw from the best practices of both
companies to ensure continuity for tenants, employees and other
stakeholders.
Upon completion of the merger, the company’s headquarters will
remain in Jericho, N.Y. The company will retain the Kimco name and
will continue to trade under the ticker symbol KIM (NYSE).
Dividend Policy
Kimco intends to maintain its current dividend level
post-closing.
First Quarter Update
During the first quarter of 2021, Kimco executed 358 leases
totaling 2.8 million square feet which includes 121 new leases for
586,000 square feet. Pro-rata rental rate spreads on comparable
leases increased 6.8%, with rental rates for new leases up 8.2% and
renewals and options growing by a combined 6.4%. Kimco ended the
quarter with a pro-rata occupancy of 93.5% with anchor and small
shop occupancy at 96.2% and 85.8%, respectively. For the first
quarter of 2021, Kimco collected 94% of its total pro-rata billed
base rents.
Advisors
Barclays and Lazard are acting as financial advisors, and
Wachtell, Lipton, Rosen & Katz is acting as legal advisor to
Kimco. J.P. Morgan is acting as exclusive financial advisor, and
Dentons is acting as legal advisor to Weingarten.
Conference Call
The companies will host a joint conference call on Thursday,
April 15, 2021 at 8:00 am ET to discuss the proposed merger.
Participants will include Conor Flynn and Drew Alexander. The
conference call-in number is 1-877-407-0784 (Domestic) or
1-201-689-8560 (International), or interested parties can join the
live webcast of the conference call by accessing the Investor
Relations section of each company’s website at www.kimcorealty.com
or www.weingarten.com.
A transcript of the call and the conference call replay will be
posted when available on the respective companies’ websites under
the Investor Relations sections.
About Kimco
Kimco Realty Corp. (NYSE:KIM) is a real estate investment trust
(REIT) headquartered in Jericho, N.Y. that is one of North
America’s largest publicly traded owners and operators of open-air,
grocery-anchored shopping centers and mixed-use assets. The
company’s portfolio is primarily concentrated in the first-ring
suburbs of the top major metropolitan markets, including those in
high barrier-to-entry coastal markets and rapidly expanding Sun
Belt cities, with a tenant mix focused on essential,
necessity-based goods and services that drive multiple shopping
trips per week. Kimco is also committed to leadership in
environmental, social and governance (ESG) issues and is a
recognized industry leader in these areas. Publicly traded on the
NYSE since 1991, and included in the S&P 500 Index, the company
has specialized in shopping center ownership, management,
acquisitions, and value enhancing redevelopment activities for more
than 60 years. As of December 31, 2020, the company owned interests
in 400 U.S. shopping centers and mixed-use assets comprising 70
million square feet of gross leasable space. For further
information, please visit www.kimcorealty.com.
About Weingarten
Weingarten Realty Investors (NYSE: WRI) is a shopping center
owner, manager and developer. At December 31, 2020, the Company
owned or operated under long-term leases, either directly or
through its interest in real estate joint ventures or partnerships,
a total of 159 properties which are located in 15 states spanning
the country from coast to coast. These properties represent
approximately 30.2 million square feet of which our interests in
these properties aggregated approximately 20.7 million square feet
of leasable area. To learn more about the Company’s operations and
growth strategies, please visit www.weingarten.com.
Forward Looking Statements
This communication contains certain “forward-looking” statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended (the “Securities Act”), and
Section 21E of the Exchange Act. Kimco Realty Corp. (“Kimco”) and
Weingarten Realty Investors (“Weingarten”) intend such
forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995 and include this statement
for purposes of complying with the safe harbor provisions. Words
such as “expects,” “anticipates,” “intends,” “plans,” “believes,”
“seeks,” “estimates,” “will,” “should,” “may,” “projects,” “could,”
“estimates” or variations of such words and other similar
expressions are intended to identify such forward-looking
statements, which generally are not historical in nature, but not
all forward-looking statements include such identifying words.
Forward-looking statements regarding Kimco and Weingarten, include,
but are not limited to, statements related to the anticipated
acquisition of Weingarten and the anticipated timing and benefits
thereof; Kimco’s expected financing for the transaction; Kimco’s
ability to deleverage and its projected target net leverage; and
other statements that are not historical facts. These
forward-looking statements are based on each of the companies’
current plans, objectives, estimates, expectations and intentions
and inherently involve significant risks and uncertainties. Actual
results and the timing of events could differ materially from those
anticipated in such forward-looking statements as a result of these
risks and uncertainties, which include, without limitation, risks
and uncertainties associated with: Kimco’s and Weingarten’s ability
to complete the acquisition on the proposed terms or on the
anticipated timeline, or at all, including risks and uncertainties
related to securing the necessary shareholder approvals and
satisfaction of other closing conditions to consummate the
acquisition; the occurrence of any event, change or other
circumstance that could give rise to the termination of the
definitive transaction agreement relating to the proposed
transaction; risks related to diverting the attention of Weingarten
and Kimco management from ongoing business operations; failure to
realize the expected benefits of the acquisition; significant
transaction costs and/or unknown or inestimable liabilities; the
risk of shareholder litigation in connection with the proposed
transaction, including resulting expense or delay; the risk that
Weingarten’s business will not be integrated successfully or that
such integration may be more difficult, time-consuming or costly
than expected; Kimco’s ability to obtain the expected financing to
consummate the acquisition; risks related to future opportunities
and plans for the combined company, including the uncertainty of
expected future financial performance and results of the combined
company following completion of the acquisition; effects relating
to the announcement of the acquisition or any further announcements
or the consummation of the acquisition on the market price of
Kimco’s common stock or Weingarten’s common shares; the possibility
that, if Kimco does not achieve the perceived benefits of the
acquisition as rapidly or to the extent anticipated by financial
analysts or investors, the market price of Kimco’s common stock
could decline; general adverse economic and local real estate
conditions; the inability of major tenants to continue paying their
rent obligations due to bankruptcy, insolvency or a general
downturn in their business; local real estate conditions; increases
in interest rates; foreign currency exchange rates; increases in
operating costs and real estate taxes; changes in the dividend
policy for Kimco’s common stock or preferred stock or Kimco’s
ability to pay dividends; impairment charges; unanticipated changes
in the company’s intention or ability to prepay certain debt prior
to maturity and/or hold certain securities until maturity;
pandemics or other health crises, such as coronavirus disease 2019
(COVID-19); and other risks and uncertainties affecting Kimco and
Weingarten, including those described from time to time under the
caption “Risk Factors” and elsewhere in Kimco’s and Weingarten’s
Securities and Exchange Commission (“SEC”) filings and reports, including Kimco’s
Annual Report on Form 10-K for the year ended December 31, 2020,
Weingarten’s Annual Report on Form 10-K for the year ended December
31, 2020, and future filings and reports by either company.
Moreover, other risks and uncertainties of which Kimco or
Weingarten are not currently aware may also affect each of the
companies’ forward-looking statements and may cause actual results
and the timing of events to differ materially from those
anticipated. The forward-looking statements made in this
communication are made only as of the date hereof or as of the
dates indicated in the forward-looking statements, even if they are
subsequently made available by Kimco or Weingarten on their
respective websites or otherwise. Neither Kimco nor Weingarten
undertakes any obligation to update or supplement any
forward-looking statements to reflect actual results, new
information, future events, changes in its expectations or other
circumstances that exist after the date as of which the
forward-looking statements were made.
Important Additional Information and Where to Find It
In connection with the proposed merger, Kimco will file with the
SEC a registration statement on Form S-4 to register the shares of
Kimco common stock to be issued in connection with the merger. The
registration statement will include a joint proxy
statement/prospectus which will be sent to the common stockholders
of Kimco and the shareholders of Weingarten seeking their approval
of their respective transaction-related proposals. INVESTORS AND
SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT ON
FORM S-4 AND THE RELATED JOINT PROXY STATEMENT/PROSPECTUS, AS WELL
AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS AND ANY OTHER
RELEVANT DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE
PROPOSED MERGER, WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT KIMCOS, WEINGARTEN AND THE
PROPOSED TRANSACTION.
Investors and security holders may obtain copies of these
documents free of charge through the website maintained by the SEC
at www.sec.gov or from Kimco at its website, www.kimcorealty.com,
or from Weingarten at its website, www.weingarten.com. Documents
filed with the SEC by Kimco will be available free of charge by
accessing Kimco’s website at www.kimcorealty.com under the heading
Investors or, alternatively, by directing a request to Kimco at
ir@kimcorealty.com or 500 North Broadway, Suite 201, Jericho, N.Y.
11753, telephone: (866) 831-4297, and documents filed with the SEC
by Weingarten will be available free of charge by accessing
Weingarten’s’ website at www.weingarten.com under the heading
Investors or, alternatively, by directing a request to Weingarten
at ir@weingarten.com or 2600 Citadel Plaza Drive, Suite 125,
Houston, TX 77008, telephone: (800) 298-9974.
Participants in the Solicitation
Kimco and Weingarten and certain of their respective directors
and executive officers and other members of management and
employees may be deemed to be participants in the solicitation of
proxies from the common stockholders of Kimco and the shareholders
of Weingarten in respect of the proposed transaction under the
rules of the SEC. Information about Kimco’s directors and executive
officers is available in Kimco’s proxy statement dated March 17,
2021 for its 2021 Annual Meeting of Stockholders. Information about
Weingarten’s directors and executive officers is available in
Weingarten’s proxy statement dated March 15, 2021 for its 2021
Annual Meeting of Shareholders. Other information regarding the
participants in the proxy solicitation and a description of their
direct and indirect interests, by security holdings or otherwise,
will be contained in the joint proxy statement/prospectus and other
relevant materials to be filed with the SEC regarding the merger
when they become available. Investors should read the joint proxy
statement/prospectus carefully when it becomes available before
making any voting or investment decisions. You may obtain free
copies of these documents from Kimco or Weingarten using the
sources indicated above.
No Offer or Solicitation
This communication shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be
any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities
Act.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210415005452/en/
Kimco – Investor Contact
David F Bujnicki, Senior Vice President, Investor Relations and
Strategy (866) 831-4297 dbujnicki@kimcorealty.com
Kimco – Media Contact
Jennifer Maisch, Vice President, Marketing and Communications
(516) 869-7224 jmaisch@kimcorealty.com
Weingarten – Investor Contact
Michelle Wiggs, Vice President, Investor Relations (713)
866-6050 ir@weingarten.com
Weingarten – Media Contact
Megan Froehlich, Director of Marketing (713) 866-6129
media@weingarten.com
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