Urstadt Biddle Properties to be Acquired for $1.4 Billion
John Jordan | May 19, 2023
GREENWICH, CT—Regency Centers Corp. of Jacksonville, FL and Urstadt Biddle Properties Inc., which is headquartered in Greenwich, CT, announced on May 18 that they had entered into a definitive merger agreement by which Regency will acquire Urstadt Biddle in an all-stock transaction, valued at approximately $1.4 billion, including the assumption of debt and preferred stock.
The combined company is expected to have a pro forma equity market capitalization of approximately $11 billion and total enterprise value of approximately $16 billion. Urstadt Biddle Properties Inc. is a self-administered equity REIT which owns or has equity interests in 77 properties containing approximately 5.3 million square feet of space. The company formerly owned the Westchester Pavilion mall in Downtown White Plains, which was the headquarters for the Hudson Gateway Association of Realtors until its relocation to its headquarters space at The Source on April 1, 2016. In early 2017, Urstadt Biddle Properties sold the vacant existing 185,000-square-foot Westchester Pavilion mall to Maple and Broadway Holdings, LLC, a subsidiary of Lennar Corp. through its Lennar Multi-Family Communities, LLC subsidiary, for $56.6 million. The Westchester Pavilion was later demolished and is to make way for a large mixed-use development.
Under the terms of the agreement, Urstadt Biddle’s Class A Common (UBA) and Common (UBP) stockholders will receive 0.347 of a newly-issued REG share for each UBA or UBP share they own, representing a total consideration of approximately $20.40 per share based on Regency’s closing share price on May 17, 2023. Upon closing, Regency and Urstadt Biddle shareholders will own approximately 93% and 7% of the combined company, respectively. The respective Boards of Directors of both Regency and Urstadt Biddle have each approved the transaction.
“We couldn’t be more excited about the combination of our two great companies,” said Lisa Palmer, President and Chief Executive Officer of Regency. “The portfolio that Urstadt Biddle has carefully assembled over more than 50 years offers a highly aligned demographic and merchandising profile to Regency. Both companies have a successful track record of owning and operating best-in-class grocery-anchored neighborhood and community centers in premier suburban trade areas, and we look forward to the synergies and growth opportunities that this transaction will offer to the combined shareholder base.”
“Regency has a long, successful history of being a sector and industry leader in the ownership and operation of high-quality shopping centers around the country, with one of the best-regarded teams in the REIT industry,” said Willing L. Biddle, President and CEO of Urstadt Biddle. “I have no doubt that our portfolio will be in great hands under Regency leadership, and as a future Regency shareholder I look forward to the scale and platform benefits that the combination of our two companies will provide.”
The combined portfolio will be comprised of 481 total properties encompassing more than 56 million square feet of gross leasable area. The combination is expected to provide several strategic benefits, including:
The transaction grows the combined company’s footprint of high-quality, grocery-anchored shopping centers in premier suburban trade areas while enhancing Regency’s overall geographic diversification and maintaining a strong tenant roster.
The transaction is expected to be immediately accretive to Core Operating Earnings, including approximately $9 million of annual cost savings benefit, Regency reported.
The transaction is currently expected to close late in the third quarter or early in the fourth quarter of 2023, subject to the receipt of approval of UBA and UBP shareholders and satisfaction of other customary closing conditions. Stockholders of UBP holding approximately 68% of UBP’s voting rights have entered into an agreement to vote in favor of the transaction. There are no anticipated changes to Regency’s executive management team or Board of Directors.
RBC Capital Markets and Wells Fargo Securities are acting as financial advisors and Wachtell, Lipton, Rosen & Katz is serving as legal advisor to Regency Centers. Eastdil Secured and Deutsche Bank are acting as financial advisors and Hogan Lovells US LLP is serving as legal advisor to Urstadt Biddle.