(Reuters) -Shopping mall operator Regency Centers (NASDAQ:REG) Corp said on Thursday it has agreed to buy Urstadt Biddle Properties (NYSE:UBA) Inc in an all-stock deal valued at about $1.4 billion, including the assumption of debt and preferred stock.
The move will help Regency expand its footprint in grocery-anchored shopping centers in suburban trade areas in the United States.
The deal comes at a time when prominent investors including hedge fund and private equity managers are shying away from real estate amid uncertainty over interest rates, recession fears and the threat of a U.S. debt default.
Regency's CEO Lisa Palmer said "the portfolio that Urstadt Biddle has carefully assembled over more than 50 years offers a highly aligned demographic and merchandising profile."
Under the deal terms, Urstadt stockholders will receive 0.347 of a newly-issued REG share for each Class A Common (UBA) and Common (UBP) share they own.
This translates to $20.40 per share, and represents a premium of about 21% to Urstadt's last close.
Regency shareholders will own about 93% of the combined company, while Urstadt Biddle shareholders will own the rest.
The combined company is expected to have an equity market capitalization of about $11 billion and total enterprise value of about $16 billion.
The combined portfolio will comprise of 481 total properties, the companies said in a statement.
The deal is expected to close late in the third quarter or early in the fourth quarter of 2023.
RBC Capital Markets and Wells Fargo (NYSE:WFC) Securities are acting as financial advisors and Wachtell, Lipton, Rosen & Katz is serving as legal advisor to Regency Centers.