Kite Realty, Retail Properties to merge in $7.5 bln US retail deal

Kite Realty Group Trust said on Monday it will buy rival Retail Properties of America Inc for about $2.8 billion to create one of the top five shopping center real estate investment trusts in the United States.

Retail Properties' stock will be converted into 0.6230 newly issued Kite Realty shares in an all-stock deal, representing an offer price of $12.98 per share and implying a premium of about 13% to Retail Properties' closing price on Friday.

The combined company is expected to have a market capitalization of about $4.6 billion and a total enterprise value of about $7.5 billion, Kite Realty said.

It also said the combination will create a portfolio of 185 open-air shopping centers comprising about 32 million square feet of gross leasable area.

Retail Properties would merge into a subsidiary of Kite Realty, with the latter continuing as the surviving company, following the close of the deal in the fourth quarter of 2021.