Regency Centers Offers To Acquire AmREIT For $22/share

(RTTNews) - Real estate investment trust Regency Centers Corp. (REG) said Thursday that it has offered to acquire AmREIT Inc. (AMRE) for $22 per share, payable either in cash or stock, or a combination of the two. Shares of AmREIT are gaining more than 14 percent in pre-market trades following the announcement.

Jacksonville, Florida-based Regency Centers said the proposal follows its previous efforts to obtain the information that would be required to go ahead with a potential transaction and was reflected in a letter to Kerr Taylor, AmREIT's chairman and CEO. The company said it was making the letter sent to Taylor public, "as the potential for a combination was just too great to ignore".

According to Regency Centers, its offer price exceeds Houston, Texas-based AmREIT's all-time high common stock price by more than $2.00 and provides more value to AmREIT shareholders than that company can reasonably expect to achieve on its own in the foreseeable future. Regency Centers currently owns about 4.2 percent of AmREIT's outstanding common stock.

Regency Centers is an operator and developer of grocery-anchored neighborhood and community shopping centers. The company's portfolio of 332 retail properties encompasses over 43.9 million square feet located in key markets throughout the U.S., including co-investment partnerships.

Regency Centers said it believes the offer is particularly compelling to AmREIT's investors due to the structural obstacles faced by their company on account of its relatively small size in relation to other public REITs. This includes more limited and costly access to capital, a more pronounced exposure to market and project concentration risk.

According to Regency Centers, the benefits of this transaction include an opportunity to leverage the synergies created by the combination of AmREIT's assets with the Regency portfolio to grow same-property net operating income or NOI, a strong balance sheet that would offer readily available capital for growth, and a strong platform from which to realize additional value through development and densification.

Regency Centers also expects that key team members of AmREIT could play an important role in continuing the development of the densification opportunities in AmREIT's portfolio and in the management of Regency's Texas shopping center portfolio.

Hap Stein, Chairman and Chief Executive Officer of Regency Centers said, "Importantly, we are willing to offer either cash or stock consideration, or a combination of the two, such that AmREIT shareholders could receive immediate and certain value for their shares and/or the opportunity to participate in the combined company's upside potential. In addition, we are willing to consider improving our offer if the company information we have asked to review demonstrates additional value, particularly in relation to AmREIT's pending and prospective densification projects."

Regency Centers said that the proposal has the unanimous support of the members of its board of directors. The company added that it has the capacity to finance this transaction from its existing credit facility.

Wells Fargo Securities is acting as financial advisor to Regency Centers, while Sullivan & Cromwell LLP as well as Foley & Lardner LLP are acting as its legal counsel.

REG closed Wednesday's trading at $55.39, down $0.02 on a volume of 349,100 shares.

AMRE closed Wednesday's trading at $19.20. In Thursday's pre-market trades, the stock is up $2.80 or 14.58 percent to $22.00.