We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Regency Centers (REG) to Acquire Urstadt Biddle in a $1.4B Deal
Read MoreHide Full Article
Regency Centers Corporation (REG - Free Report) announced that it has agreed to buy Urstadt Biddle Properties Inc. and , a real estate investment trust that owns and operates retail properties in the suburban New York metropolitan area, in an all-stock transaction valued at approximately $1.4 billion.
The deal, which has been approved by both the companies' boards of directors, will create a combined portfolio of 481 properties with more than 56 million square feet of gross leasable area. The merger is expected to enhance Regency's geographic diversification, tenant mix, growth prospects and balance sheet strength.
For the combined entity, the enterprise value is estimated at $16 billion, with a pro forma equity market capitalization of around $11 billion.
Deal Terms & Rationale
Under the deal terms, Urstadt Biddle’s Class A Common and Common stockholders will receive 0.347 of a newly issued REG share for each UBA or UBP share they hold, calculated to be about $20.40 per share based on Regency’s closing share price on May 17, 2023. Post-merger, Regency shareholders will enjoy 93% ownership of the combined company, while the rest 7% will go to Urstadt Biddle shareholders.
The transaction is expected to be immediately accretive to Regency's core operating earnings, including roughly $9 million of annual cost savings benefit. The merger also preserves Regency’s strong balance sheet and flexibility for further growth, maintaining a pro forma leverage at the low end of its 5.0X-5.5X target range.
The merger is expected to close late in the third quarter or early in the fourth quarter of 2023, subject to the approval of UBA and UBP shareholders and other customary closing conditions. The stockholders of UBP holding approximately 68% of UBP's voting rights have entered into an agreement to vote in favor of the transaction.
The deal will combine two highly aligned portfolios of high-quality, open-air shopping centers that are predominantly anchored by grocery stores and located in premier suburban trade areas. Both companies have a successful track record of owning and operating best-in-class retail properties with strong tenant rosters and high occupancy rates.
Conclusion
In an industry where strategic alignments can bring about significant growth and value creation, this merger signals a promising future for Regency and Urstadt Biddle shareholders.
Shares of this Zacks Rank #3 (Hold) company have declined 9.5% in the past three months compared with its industry’s fall of 7.6%.
The Zacks Consensus Estimate for Saul Centers’ ongoing year’s FFO per share has been revised marginally upward over the past month to $3.03.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Regency Centers (REG) to Acquire Urstadt Biddle in a $1.4B Deal
Regency Centers Corporation (REG - Free Report) announced that it has agreed to buy Urstadt Biddle Properties Inc. and , a real estate investment trust that owns and operates retail properties in the suburban New York metropolitan area, in an all-stock transaction valued at approximately $1.4 billion.
The deal, which has been approved by both the companies' boards of directors, will create a combined portfolio of 481 properties with more than 56 million square feet of gross leasable area. The merger is expected to enhance Regency's geographic diversification, tenant mix, growth prospects and balance sheet strength.
For the combined entity, the enterprise value is estimated at $16 billion, with a pro forma equity market capitalization of around $11 billion.
Deal Terms & Rationale
Under the deal terms, Urstadt Biddle’s Class A Common and Common stockholders will receive 0.347 of a newly issued REG share for each UBA or UBP share they hold, calculated to be about $20.40 per share based on Regency’s closing share price on May 17, 2023. Post-merger, Regency shareholders will enjoy 93% ownership of the combined company, while the rest 7% will go to Urstadt Biddle shareholders.
The transaction is expected to be immediately accretive to Regency's core operating earnings, including roughly $9 million of annual cost savings benefit. The merger also preserves Regency’s strong balance sheet and flexibility for further growth, maintaining a pro forma leverage at the low end of its 5.0X-5.5X target range.
The merger is expected to close late in the third quarter or early in the fourth quarter of 2023, subject to the approval of UBA and UBP shareholders and other customary closing conditions. The stockholders of UBP holding approximately 68% of UBP's voting rights have entered into an agreement to vote in favor of the transaction.
The deal will combine two highly aligned portfolios of high-quality, open-air shopping centers that are predominantly anchored by grocery stores and located in premier suburban trade areas. Both companies have a successful track record of owning and operating best-in-class retail properties with strong tenant rosters and high occupancy rates.
Conclusion
In an industry where strategic alignments can bring about significant growth and value creation, this merger signals a promising future for Regency and Urstadt Biddle shareholders.
Shares of this Zacks Rank #3 (Hold) company have declined 9.5% in the past three months compared with its industry’s fall of 7.6%.
Image Source: Zacks Investment Research
A Stock to Consider
A better-ranked stock from the retail REIT sector is Saul Centers, Inc. (BFS - Free Report) , which carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Saul Centers’ ongoing year’s FFO per share has been revised marginally upward over the past month to $3.03.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.