- Inland Real Estate Corporation stockholders
to receive $10.60 per share in cash in transaction valued at $2.3
billion -
Inland Real Estate Corporation (NYSE:IRC) (“the Company” or
“IRC”) today announced that it has entered into a definitive
agreement (the “Merger Agreement”) to be acquired by real estate
funds managed by DRA Advisors LLC (“DRA”), in a transaction (the
“Merger”) valued at approximately $2.3 billion, including the
assumption of existing debt. Under the terms of the Merger
Agreement, funds managed by DRA will acquire all issued and
outstanding common stock of IRC for $10.60 per share in cash. The
Merger Agreement culminates a process that included extensive
discussions with other potential strategic and financial buyers.
Upon completion of the Merger, IRC will become a privately-held
real estate investment trust.
“The Board has been focused on the options available to address
the long-term discount at which the Company’s shares have traded
versus private market valuations and its shopping center REIT
peers,” said Thomas P. D’Arcy, non-executive chairman of IRC. “The
Board unanimously believes this all-cash offer is the best course
of action to address this valuation gap and provide our
stockholders with strong relative value for their investment.”
“We are excited to enter into an agreement to acquire Inland
Real Estate Corporation,” said David Luski, President of DRA. “IRC
is a company with quality assets, a strong management team and
great long-term potential. We look forward to closing the
transaction and adding the IRC platform to our portfolio.”
The cash merger consideration of $10.60 per share represents an
approximate 6.6% premium over the Company’s closing stock price on
December 14, 2015, the last trading day prior to the public
announcement of the Merger Agreement, and an approximate 11.5% and
15.9% premium over the volume weighted average closing prices of
IRC common stock over the 30-day and 60-day periods ended December
14, 2015, respectively. IRC expects to pay regular monthly cash
distributions of $0.0475 per share on the outstanding shares of its
common stock until the Merger closes. In addition, the Merger
Agreement provides that the Company will pay monthly cash dividends
of $0.169271 per share on the outstanding shares of its 8.125%
Series A Cumulative Redeemable Preferred Stock (the “Series A
Preferred Stock”) and $0.144791667 per share on the outstanding
shares of its 6.95% Series B Cumulative Redeemable Preferred Stock
(the “Series B Preferred Stock”) through the close of the Merger,
and that, within 15 days following the closing of the Merger, the
post-Merger company will redeem all of the issued and outstanding
shares of Series A Preferred Stock and Series B Preferred Stock
pursuant to its special optional redemption right.
“Over the years, our team has worked diligently to enhance the
overall quality and performance of our retail portfolio,” said Mark
Zalatoris, president and chief executive officer of Inland Real
Estate Corporation. “We are pleased DRA recognizes the value
inherent in the retail platform we have established.”
“It has been a pleasure working with the IRC Board and its
management team,” said Brian T. Summers, Chief Financial Officer of
DRA. “We look forward to a successful completion of the
transaction.”
Approvals and Anticipated Closing
IRC’s Board has unanimously approved the Merger Agreement and
the Merger. Completion of the Merger, which is expected to occur in
the first half of 2016, is contingent upon customary closing
conditions, including the approval of IRC’s stockholders, who will
vote on the Merger at a special meeting on a date to be
announced.
Advisors
BMO Capital Markets Corp. and Silver Portal Capital acted as
financial advisors and Proskauer Rose LLP acted as legal counsel to
IRC. Blank Rome LLP acted as legal counsel to DRA. BMO Capital
Markets Corp. provided a fairness opinion to the Company’s Board of
Directors in connection with the Merger.
Financing
In connection with the Merger, DRA has obtained a commitment
letter for debt financing from Wells Fargo Bank, as Lender and
Administrative Agent, and Wells Fargo Securities, as Sole Lead
Arranger and Bookrunner.
About Inland Real Estate Corporation
Inland Real Estate Corporation is a self-advised and
self-managed publicly traded real estate investment trust (REIT)
focused on owning and operating open-air neighborhood, community,
and power shopping centers located in well-established markets
primarily in the Central and Southeastern United States. As of
September 30, 2015, the Company owned interests in 135 fee
simple investment properties, including 36 owned through its
unconsolidated joint ventures, with aggregate leasable space of
approximately 15 million square feet. Additional information on
Inland Real Estate Corporation is available at
www.inlandrealestate.com.
About DRA Advisors LLC
DRA Advisors LLC (DRA) is a registered SEC investment advisor
with $6.8 billion of assets under management, headquartered in New
York with offices in San Francisco and Miami. DRA has been in
existence for 29 years with investors that include public and
corporate pension funds, endowments, foundations and financial
institutions. As of September 30, 2015, DRA has invested in
properties valued in excess of $23.5 billion. Additional
information on DRA Advisors LLC is available at
www.draadvisors.com.
Forward Looking Statements
Certain information in this press release may constitute
“forward-looking statements” within the meaning of the Federal
Private Securities Litigation Reform Act of 1995. Forward-looking
statements are statements that do not reflect historical facts and
instead reflect our management’s intentions, beliefs, expectations,
plans or predictions of the future. Forward-looking statements can
often be identified by words such as “seek,” “believe,” “expect,”
“anticipate,” “intend,” “estimate,” “may,” “will,” “should” and
“could.” Examples of forward-looking statements include, but are
not limited to, statements that describe or contain information
related to matters such as management’s intent, belief or
expectation with respect to our financial performance, investment
strategy or our portfolio, our ability to address debt maturities,
our cash flows, our growth prospects, the value of our assets, our
joint venture commitments and the amount and timing of anticipated
future cash distributions. Forward-looking statements reflect the
intent, belief or expectations of our management based on their
knowledge and understanding of our business and industry and their
assumptions, beliefs and expectations with respect to the market
for commercial real estate, the U.S. economy and other future
conditions. Forward-looking statements are not guarantees of future
performance, and investors should not place undue reliance on them.
Actual results may differ materially from those expressed or
forecasted in forward-looking statements due to a variety of risks,
uncertainties and other factors, including but not limited to the
occurrence of any event, change or other circumstance that could
give rise to the termination of the Merger Agreement, and the risk
that the Merger Agreement may be terminated in circumstances that
require the Company to pay a termination fee of $30 million plus
expenses; the outcome of any legal proceedings that may be
instituted against the Company related to the Merger Agreement or
any of the transactions contemplated by the Merger Agreement; the
failure to satisfy the conditions to completion of the transactions
contemplated by the Merger Agreement, including the failure to
obtain the required approval of the Company’s stockholders; the
failure of DRA to consummate its necessary financing arrangements;
risks that the Merger disrupts current plans and operations of the
Company and the potential difficulties in employee retention as a
result of the proposed transactions; the effects of local, national
and global economic, credit and capital market conditions on the
economy in general, and other risks and uncertainties; as well as
the risks listed and described under Item 1A“Risk Factors” in our
Annual Report on Form 10-K for the year ended December 31, 2014, as
filed with the Securities and Exchange Commission (the “SEC”) on
February 27, 2015, as they may be revised or supplemented by us in
subsequent Reports on Form 10-Q and other filings with the SEC.
Except as otherwise required by applicable law, the Company
disclaims any obligation or undertaking to publicly release any
updates or revisions to any forward-looking statement in this
release to reflect any change in the Company’s expectations or any
change in events, conditions or circumstances on which any such
statement is based.
Additional Information about the Proposed Merger and Where to
Find It
This press release does not constitute an offer to sell or the
solicitation of an offer to buy the securities of IRC or the
solicitation of any vote or approval. The proposed merger of the
Company will be submitted to the stockholders of the Company for
their approval. In connection with the proposed merger, the Company
expects to file with the SEC relevant materials, including a
definitive proxy statement which will be mailed or otherwise
disseminated to the Company’s stockholders when it becomes
available. IRC STOCKHOLDERS ARE ENCOURAGED TO READ THE PROXY
STATEMENT AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IF AND
WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. You may obtain a free copy of the proxy statement and
other relevant documents filed by the Company with the SEC at the
SEC’s website, www.sec.gov, or from IRC at its website,
www.inlandrealestate.com, or by contacting IRC’s Investor Relations
department at 888-331-4732 or ir@inlandrealestate.com.
IRC and its directors, executive officers and other employees
may be deemed to be participants in the solicitation of proxies in
respect of the proposed merger. Information regarding the Company’s
directors and executive officers is detailed in its proxy
statements and annual reports on Form 10-K and quarterly reports on
Form 10-Q, previously filed with the SEC. Additional information
regarding the direct and indirect interests of the Company’s
directors and officers in the proposed merger may be obtained by
reading the proxy statement relating to the proposed merger, when
it becomes available.
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version on businesswire.com: http://www.businesswire.com/news/home/20151215005637/en/
Investor Relations Contacts:For Inland Real Estate
Corporation:Dawn BencheltAssistant Vice President, Director of
Investor Relations888-331-4732ir@inlandrealestate.comorFor DRA
Advisors LLC:Paul McEvoy or Adam
Breenpmcevoy@draadvisors.comabreen@draadvisors.com212-697-4740orMedia
Contacts:For Inland Real Estate Corporation:Phil Denning or
Jason Chudobaphil.denning@icrinc.com;
646-277-1258jason.chudoba@icrinc.com; 646-277-1249orFor DRA
Advisors LLC:Paul McEvoy or Adam
Breenpmcevoy@draadvisors.comabreen@draadvisors.com212-697-4740
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