Kimco Sees Further Opportunity from Albertsons Companies Investment
February 20 2018 - 7:11AM
Business Wire
Albertsons-Rite Aid merger brings Company’s
2020 Vision one step closer
Kimco Realty Corp. (NYSE:KIM) confirms its participation as an
investor in connection with today’s announced execution of a
definitive agreement under which Albertsons Companies
(“Albertsons”) will acquire all outstanding shares of Rite Aid
Corporation (NYSE: RAD). Following the close of the transaction,
the combined company is expected to trade on the New York Stock
Exchange. The merger is expected to close early in the second half
of 2018, subject to the approval of Rite Aid’s shareholders,
regulatory approvals, and other customary closing conditions.
“Today’s announced agreement between Albertsons and Rite Aid
will result in a stronger, more diversified company that combines
health, wellness and convenience to deliver an enhanced customer
experience, demonstrating what we believe is the future of retail,”
stated Conor Flynn, Kimco’s Chief Executive Officer. “Additionally,
this merger underscores how we continue to benefit from our highly
successful investment in Albertsons. Upon completion, we will have
a clear indication of the resulting market value of our stake.”
Flynn continued, “Beyond the strong returns we have already
generated, we will have greater flexibility and liquidity with our
investment via the public markets.”
As of December 31, 2017, Kimco maintains a 9.74 percent
ownership interest in the existing Albertsons, with a cumulative
investment of $140 million that is on the cost method of
accounting. Once the merger transaction is consummated, the company
will treat this investment as a marketable security with the
resulting change in market value reflected in the company’s
statement of operations, with proceeds from a potential future sale
of the company’s investment accretive to cash flow. Should Kimco
decide to monetize its investment in the coming years, consistent
with its 2020 Vision, it would expect to utilize proceeds to
further reduce leverage, fund future development and redevelopment
activity, or buy back shares under the recently authorized stock
repurchase program.
History
In 2006, a Cerberus-led investment group acquired 661 non-core
Albertsons stores from Albertsons, Inc. Kimco invested
approximately $51 million. In 2013, the investment group acquired
the remaining Albertsons stores, as well as the grocery banners of
Jewel-Osco, Acme, Shaws and Star Markets, from SUPERVALU (NYSE:
SVU) for $3.3 billion, with Kimco contributing an additional $37
million. As part of this transaction, Kimco purchased 8.2 million
shares of SUPERVALU common stock for $33.6 million, which was
subsequently sold for a $39.9 million gain. The consortium then
acquired the Safeway grocery banner in 2015, with Kimco
contributing $90 million. Through the end of 2017, Kimco had
received in excess of $300 million in cash distributions from its
Albertsons investment, inclusive of the proceeds from the SUPERVALU
stock sale.
Conference Call Details
An analyst call will be conducted at 8:30 a.m. Eastern Time
today with remarks by management teams from Albertsons and Rite
Aid. The call will be simulcast via the internet and can be
accessed at www.riteaid.com in the conference call section of
investor information. The investor presentation can be accessed on
the Investor Relations section of www.riteaid.com and on
www.albertsonscompanies.com/investors.
About Kimco
Kimco Realty Corp. (NYSE: KIM) is a real estate investment trust
(REIT) headquartered in New Hyde Park, N.Y., that is one of North
America’s largest publicly traded owners and operators of open-air
shopping centers. As of December 31, 2017, the company owned
interests in 492 U.S. shopping centers comprising 83 million square
feet of leasable space primarily concentrated in the top major
metropolitan markets. Publicly traded on the NYSE since 1991, and
included in the S&P 500 Index, the company has specialized in
shopping center acquisitions, development and management for 60
years. For further information, please visit www.kimcorealty.com,
the company’s blog at blog.kimcorealty.com, or follow Kimco on
Twitter at www.twitter.com/kimcorealty.
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version on businesswire.com: http://www.businesswire.com/news/home/20180220005815/en/
Kimco Realty Corp.David F. Bujnicki, 1-866-831-4297Senior Vice
President, Investor Relations and
Strategydbujnicki@kimcorealty.com
Kimco Realty (NYSE:KIM)
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