Washington Prime Group To Buy Glimcher Realty In $4.3 Bln Deal

(RTTNews) - Real estate investment trust Washington Prime Group Inc. (WPG) has agreed to acquire peer Glimcher Realty Trust (GRT) in a deal valued at about $4.3 billion in cash and stock, including the assumption of debt, the two companies said Tuesday. Shares of Glimcher Realty are gaining 30 percent following the announcement.

Bethesda, Maryland-based Washington Prime Group was spun off from mall operator Simon Property Group, Inc. (SPG) in May 2014.

Washington Prime Group or WPG owns and manages 96 shopping centers totaling more than 50 million square feet. Columbus, Ohio-based Glimcher Realty is a developer of retail properties, including mixed use, open-air and enclosed regional malls as well as outlet centers.

The combined company will be comprised of about 68 million square feet of gross leasable area and will have a combined portfolio of 119 properties.

Under the terms of the transaction, Glimcher's shareholders will receive $10.40 in cash and 0.1989 of a share in WPG stock at closing. The stock portion of the consideration is valued at $3.80.

The total offer price is valued at $14.20 per share, representing a 34 percent premium to Glimcher's closing stock price of $10.59 on Monday, September 14.

The transaction has been approved by WPG's board of directors as well as Glimcher's board of trustees, and requires approval by Glimcher shareholders.

As part of the transaction, Simon Property Group will acquire two properties from Glimcher for $1.09 billion in cash.

The properties are Jersey Gardens mall in Elizabeth, New Jersey and University Park Village in Fort Worth, Texas. The completion of the sale of these properties to Simon Property Group will occur concurrent with the closing of Glimcher's acquisition by WPG.

The merger transaction is expected to close in the first quarter of 2015. WPG expects the cash portion of the consideration to be funded by asset sales to Simon Property Group, joint ventures with institutional partners, other assets sales, capital markets transactions, and draws under a fully committed bridge facility of $1.25 billion provided by Citi.

Upon completion of the merger, the combined company will be renamed WP Glimcher, and will maintain Glimcher's headquarters in Columbus, Ohio. The new entity will trade on the New York Stock Exchange under the ticker "WPG."

Mark Ordan, the chief executive officer of Washington Prime, will serve as executive chairman of the board of directors of the combined company.

Michael Glimcher, CEO of Glimcher, will serve as the combined company's vice chairman & CEO reporting to Ordan. Glimcher and one additional board member of Glimcher will join the new nine-member board.

Mark Ordan, chief executive officer of WPG, said, "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. This transaction with Glimcher checks every box, very early in our company's trajectory."

WPG expects the transaction to be accretive to its normalized funds from operations per share, and also expects substantial G&A as well as property-level expense synergies. The combined company expects to maintain WPG's current quarterly dividend at an annual rate of $1.00 per share.

Citi is serving as financial advisor to WPG, while Wachtell, Lipton, Rosen & Katz is serving as its legal advisor. Willkie Farr & Gallagher LLP is serving as legal advisor to WPG in connection with the sale of the two Glimcher properties to Simon.

For Glimcher, GreenOak Real Estate US LLC and Morgan Stanley & Co. LLC are serving as financial advisors, while Simpson Thacher & Bartlett LLP is serving as legal advisor.

WPG is currently trading at $17.78, down $0.68 or 3.68 percent on a volume o f 1.27 l shares.

GRT is trading at $13.79, up $3.20 or 30.22 percent on a volume of 9.09 million shares.