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Equity One and IRT Property CompanyAnnounce Proposed Merger
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01/16/2005
Equity One Inc. (NYSE:EQY) and IRT Property Company (NYSE:IRT) announced today that they have entered into a definitive merger agreement pursuant to which Equity One will acquire IRT. In the merger, each IRT shareholder may elect to receive for each share of IRT common stock either $12.15 in cash or 0.9 shares of Equity One common stock, or a combination thereof. The terms of the merger agreement further provide that the holders of no more than 50% of IRT's outstanding common stock may receive cash. Assuming a 50% cash election and yesterday's $13.59 closing price for Equity One common stock, the transaction values IRT at $730 million, including the assumption by Equity One of $297 million of IRT debt and transaction costs. Equity One has secured binding commitments to finance the cash consideration. Equity One intends to fund a portion of the cash consideration through the private placement of up to 6.9 million shares of Equity One common stock to existing, affiliated investors at a price of $13.30 per share subject to pro rata upward adjustment to a maximum of $13.50 per share as the number of IRT shares converted into Equity One common stock rises from 50% to approximately 55.8%. Equity One intends to fund the balance of the cash consideration from existing and new credit facilities, all of which are currently in place or commitments for which have been obtained. "IRT and Equity One operate in the same region and focus on the same asset class," said Chaim Katzman, Chairman and CEO of Equity One. "This transaction will more than double our shopping-center portfolio and will create one of the largest retail REITs focused on the southeast, solidifying our leadership in the supermarket-anchored shopping-center sector. IRT has 30 years of experience building a stable portfolio in the southeast, while Equity One has a proven track record developing and managing a growth-oriented portfolio in Florida and Texas through the acquisition and development of properties, as well as the sourcing and integration of major portfolios. We will more than double our equity market float, will expand our equity research coverage and hope to maintain IRT's investment-grade rating, thereby providing both equity and debt investors with a compelling opportunity." Thomas H. McAuley, Chairman and CEO of IRT, added: "This is an opportunity for us to combine our strengths and long-term business relationships in southeastern markets with Equity One's proven ability in the acquisition, development and management of supermarket-anchored shopping centers in Florida and Texas. Moreover, the merger will give IRT shareholders the opportunity to take cash or continue as an investor with a 3.4% increase in their dividend. This transaction creates a much larger company, better tenant diversification and a platform to increase shareholder value."
