Kimco Realty, North America’s largest publicly traded owner and operator of open-air, grocery-anchored shopping centers and a portfolio of mixed-use assets, has completed its all-stock US $2 billion acquisition of RPT Realty (RPT) which was first announced in August 2023.

The acquisition adds 56 open-air shopping centers, 43 of which are wholly owned, comprising 13.3 million square feet of gross leasable area, to Kimco’s existing portfolio of 527 properties. The all-stock transaction, including the assumption of debt and preferred stock, results in a number of benefits including earnings accretion stemming from initial cost savings synergies of approximately US $34 million, of which approximately 85% is expected to be realized in 2024.

In addition to increased scale in high-growth target markets, the company cites expanded partnership opportunities, and ‘preservation of balance sheet strength’ as benefits of the acquisition.

Merger-related and other costs associated with the acquisition will be absorbed by Net Income and Funds From Operations (FFO) as part of Kimko Realty’s full year 2024 outlook when it reports fourth quarter earnings.

Conor Flynn, Chief Executive Officer of Kimco, says: “We are pleased to announce the successful completion of our acquisition of RPT, which will enable us to drive longterm growth and value creation for our shareholders in a leverage-neutral manner through embedded growth opportunities and economies of scale advantages.”

Pursuant to the terms of the definitive merger agreement entered into by and among Kimco, RPT and certain of their respective subsidiaries, on August 28, 2023, RPT common shareholders are entitled to receive 0.6049 shares of Kimco common stock, together with cash in lieu of fractional shares, for each RPT common share that they owned immediately prior to the effective time of the merger, and RPT preferred shareholders are entitled to receive one depositary share representing 1/1,000th of a share of Kimco 7.25% Class N Cumulative Convertible Perpetual Preferred Stock (“Kimco Class N Preferred Stock”) for each RPT 7.25% Series D Cumulative Convertible Perpetual Preferred Share (“RPT Series D Preferred Share”) that they owned immediately prior to the effective time of the merger.

Pursuant to the terms of the Kimco Class N Preferred Stock, the Company’s Board of Directors declared a “stub period” cash dividend in an amount equal to US $0.14097 per depositary share representing Kimco Class N Preferred Stock, payable on January 16, 2024 to shareholders of record on January 5, 2024. The stub dividend reflects the regular quarterly dividend for the Kimco Class N Preferred Stock in respect of the period from January 1, 2024, the last dividend payment date in respect of the RPT Series D Preferred Shares, to, but excluding, January 15, 2024.

J.P. Morgan acted as exclusive financial advisor and Wachtell, Lipton, Rosen & Katz acted as legal advisor to Kimco in connection with the acquisition. Lazard acted as exclusive financial advisor and Goodwin Procter LLP acted as legal advisor to RPT.

We are pleased to announce the successful completion of our acquisition of RPT, which will enable us to drive longterm growth and value creation for our shareholders in a leverage-neutral manner through embedded growth opportunities and economies of scale advantages.