Weingarten Realty to be acquired in $4B deal

Shopping center giant Kimco to get a 71 percent share

Weingarten Realty Investors, the Houston-based real estate investment trust focused on retail holdings, has agreed to be acquired by Kimco Realty Corp., which bills itself as one of North America’s largest publicly traded owners and operators of openair, grocery-anchored shopping centers and mixed-use properties.

The deal is valued at about $30.32 per Weingarten share, or about $4 billion. In a statement, the companies said the market capitalization of the combined businesses would be approximately $12 billion. Kimco shareholders are expected to own approximately 71 percent of the combined company’s equity; Weingarten shareholders are expected to own the balance.

In the announcement, Andrew “Drew” Alexander, chairman and chief executive of Weingarten, said, “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.”

The merged business will have a portfolio of 559 open-air grocery-anchored shopping centers and mixed-use assets comprising approximately 100 million square feet of gross leasable area. Weingarten owns 159 properties in 15 states.

The pandemic year hit retailers particularly hard, and Weingarten felt the impact. For the year ended Dec. 31, it had revenue of $434 million, down from $487 million the year earlier and

$531 million in 2018. Net income in 2020 plummeted to $119 million (88 cents per diluted share) from $315 million ($2.44) the year before.

“Beginning in the second quarter of 2020, we entered into deferrals and abatement agreements with our tenants to provide some relief to the tenants greatly impacted by the COVID-19 shut down,” it said in its recent annual report for the year ended Dec. 31. “As of Feb. 12, 2021, we have negotiated deferrals with tenants on approximately 995 leases, of which nearly $17.9 million remains of rental payments that have been billed or are to be billed and are primarily scheduled to be repaid by Dec. 31, 2021.”

The company drew heat recently when it could not come to terms on a new lease with the River Oaks Theatre, a tenant at its River Oaks Shopping Center. The theater, Houston’s last remaining vintage movie house, closed last month.