INDIANAPOLIS — Kite Realty Group Trust (NYSE: KRG) has completed a $2.1 billion merger with Inland Diversified Real Estate Trust Inc. The shareholders of Kite Realty and the stockholders of Inland Diversified approved the transaction at special meetings held on June 24.
The combined company will continue to trade under Kite Realty’s existing ticker symbol, KRG, on the New York Stock Exchange. As a result of the merger, each former share of Inland Diversified common stock has been converted into 1.707 newly issued Kite Realty common shares.
“We are extremely excited to close the merger with Inland Diversified, which represents a transformative event in the history of our company. This transaction creates a $4 billion company and provides a number of significant financial and operational benefits,” says John Kite, chairman and CEO of Kite Realty.
“We expect to realize numerous financial benefits from the merger, including a substantial increase in cash flow and liquidity, a lower cost of capital, and a strengthened balance sheet. Operational opportunities include improved synergies from an expanded platform and the leveraging of Inland Diversified’s high-quality portfolio with strong demographic profiles in dynamic new markets. This will provide profitable redevelopment opportunities and the ability to enhance our relationships with national, regional, and local tenants,” Kite continues.
Kite Realty’s board of trustees now consists of nine members, six of whom are continuing trustees of Kite Realty and three of whom were designated by Inland Diversified. The six continuing Kite Realty trustees are John Kite, William Bindley, Victor Coleman, Christie Kelly, David O'Reilly and Barton Peterson.
The three Inland Diversified designees to the board are Lee Daniels, Gerald Grupe and Charles Wurtzebach, who were all independent directors of Inland Diversified. Dr. Richard Cosier and Gerald Moss, former trustees of Kite Realty, retired from the board as of the closing of the merger transaction.
Kite, Thomas McGowan, president and COO and Daniel Sink, executive vice president and CFO, executive officers of Kite Realty, will continue to serve in their respective roles following completion of the merger transaction.
Bank of America Merrill Lynch and Barclays acted as financial advisors to Kite Realty, in the transaction. Hogan Lovells US LLP provided legal counsel for Kite Realty in the merger transaction.
Wells Fargo Securities acted as financial advisor to the special committee of the board of directors of Inland Diversified. Alston & Bird LLP provided legal counsel to Inland Diversified’s special committee.
Kite Realty Group Trust is a full-service REIT focused in the ownership, operation, management, leasing, acquisition, construction, redevelopment and development of neighborhood and community shopping centers in selected markets in the United States. After the merger with Inland Diversified, the company now owns interests in a portfolio of 133 operating, development and redevelopment properties totaling approximately 21 million owned square feet across 26 states.
Inland Diversified Real Estate Trust is a public non-listed REIT focused on acquiring commercial real estate assets in various property categories, including grocery-anchored shopping centers, necessity-based retail assets, single-tenant office and multifamily assets.
The stock price of Kite Realty Group Trust closed at $6.25 per share on Tuesday, July 1, up from $6 per share on Monday, July 1, 2013.
— Danielle Everson