The Real Deal Miami

Regency set to acquire Equity One in $5B deal

Shareholders still need to approve the merger
November 15, 2016 01:30PM

Regency Centers CEO Martin Stein and Equity One CEO David Lukes

Regency Centers CEO Martin Stein and Equity One CEO David Lukes

In one of the U.S. real estate industry’s largest corporate buyouts this year, Jacksonville-based Regency Centers has announced it plans to acquire North Miami Beach-based Equity One for roughly $5 billion.

The deal would form one of the country’s biggest retail investment firms, according to the Wall Street Journal, boasting a market capitalization of $15.6 billion.

Regency and Equity’s combined portfolio would encompass 57 million square feet of retail space stretched across 429 retail properties nationwide, mostly located in wealthier, dense neighborhoods nationwide, the Journal reported.

Both companies are real estate investment trusts that primarily own shopping centers with grocery store anchors.

The all-stock deal would see each of Equity’s shares exchanged for 0.45 shares of the new Regency Centers stock, the Journal reported, equating to about $31.44 per Equity One share as of Monday. The new company would be 62 percent owned by Regency, and Equity would hold the remaining stake.

Real estate companies in particular have seen a wave of mergers and acquisitions around the globe this year, with $300 billion worth of deals announced as of November, the newspaper reported. Among those, $50 billion were from REITs.

In the U.S. and Canada, however, the REIT buyout craze has been much more subdued. As The Real Deal reported last week, only $9.2 billion worth of deals were struck between the two countries this year, putting the industry on track for its lowest volume since 2012.

Shareholders for each company still need to approve the merger. If given the green light, the Journal reported, Regency and Equity could consummate the deal between the first and second quarter of 2017. [Wall Street Journal]Sean Stewart-Muniz