By Gail Kalinoski, Contributing Editor
Washington Prime Group, Inc., a REIT recently spun off from Simon Property Group, Inc., will buy Glimcher Realty Trust in a $4.3 billion deal that includes the sale of two retail assets to Simon for $1.09 billion.
The combined portfolio would have 119 retail properties with approximately 68 million square feet of gross leaseable area.
Announced Tuesday morning, the definitive agreement is a stock and cash transaction that values Glimcher’s common shares at $14.20 per share and includes assumption of debt.
The transaction is expected to close in the first quarter of 2015. The cash portion of the deal is expected to be funded with the sale of two Glimcher-owned shopping centers–Jersey Gardens in Elizabeth, N.J., and University Park Village in Fort Worth, Texas–to Simon. Also funding the sale would be joint ventures with institutional partners, other asset sales, capital market transactions and/or draws under a $1.25 billion fully committed bridge facility provided by Citi.
The combined company will be renamed WP Glimcher and will maintain Glimcher’s headquarters in Columbus, Ohio. Mark Ordan, CEO of Washington Prime of Bethesda, Md., will serve as executive chairman of the Board of Directors and Michael Glimcher, CEO of Glimcher, will be vice chairman and CEO reporting to Ordan. Glimcher and one Glimcher board member will join the new nine-member board. The new company will trade on the New York Stock Exchange as WPG.
“We went public just three months ago, expecting to utilize our strong platform, relationship with Simon, cash flow and investment grade balance sheet to grow,” Ordan said in a statement. “This transaction with Glimcher checks every box very early in our company’s trajectory.”
“We believe there is immediate benefit to our shareholders and our associates when we consider the growth profile of the joint company,” Glimcher stated in the joint announcement. “Together, we gain a competitive advantage with a premier balance sheet, a larger pool of assets, and a proven platform to deliver results.”
Under the agreement, Glimcher shareholders will receive $10.40 in cash and 0.1989 of a share in WPG stock at closing.
As of 11:30 a.m. Eastern Time on Tuesday, Glimcher (GRT) stock was trading at $13.69, up $3.10, or 29 percent. Washington Prime (WPG) stock was at $16.99, down $1.47, or about 8 percent.
Citi is serving as financial advisor, and Wachtell, Lipton, Rosen & Katz is the legal advisor to WPG. Wilkie Farr & Gallagher L.L.P., is serving as legal advisor to WPG for the sale of the two Glimcher properties to Simon. GreenOak Real Estate US L.L.C. and Morgan Stanley & Co. L.L.C. are serving as financial advisors and Simpson Thacher & Bartlett L.L.P. is the legal advisor to Glimcher.