UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant ☒
Filed by a party other than the Registrant
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under §240.14a-12
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KIMCO REALTY CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check all boxes that apply):
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No fee required
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Fee paid previously with preliminary materials
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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11
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KIMCO REALTY CORPORATION
OFFER TO PURCHASE FOR CASH ANY AND ALL
OF ITS OUTSTANDING DEPOSITARY SHARES REPRESENTING 1/1,000
OF A SHARE OF 7.25% CLASS N CUMULATIVE CONVERTIBLE
PERPETUAL PREFERRED STOCK AND CONSENT SOLICITATION
THE OFFER (AS DEFINED BELOW) AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON DECEMBER 4, 2024, UNLESS KIMCO REALTY CORPORATION EXTENDS OR EARLIER TERMINATES THE OFFER (SUCH TIME AND DATE, AS IT MAY BE EXTENDED WITH RESPECT TO THE OFFER, THE “
EXPIRATION DATE
”).
On August 28, 2023, Kimco Realty Corporation, a Maryland corporation (the “
Company
”), and RPT Realty, a Maryland real estate investment trust (“
RPT
”), entered into a definitive merger agreement (the “
Merger
Agreement
”) pursuant to which the Company would acquire RPT through a series of mergers (collectively, the “
RPT
Merger
”). On January 2, 2024, RPT merged with and into the Company, with the Company continuing as the surviving public company. Under the terms of the Merger Agreement, each 7.25% Series D Cumulative Convertible Perpetual Preferred Share of RPT (the “
RPT Preferred Shares
”) was converted into the right to receive one depositary share issued by the Company (each, a “
Security
” and, collectively, the “
Securities
”) representing one one-thousandth of a share of the Company’s 7.25% Class N Cumulative Convertible Perpetual Preferred Stock, par value $1.00 per share (the “
Class N Preferred Stock
”). In connection with the RPT Merger, the Company issued 1,848,539 Securities representing in the aggregate approximately 1,849 shares of Class N Preferred Stock.
See
Section 10.
The Company hereby offers to purchase for cash, upon the terms and subject to the conditions set forth in this offer to purchase (as it may be amended or supplemented from time to time, the “
Offer to Purchase and Consent
Solicitation
”) and in the accompanying letter of transmittal and consent (as it may be amended or supplemented from time to time, the “
Letter of Transmittal and Consent
,” and, together with this Offer to Purchase and Consent Solicitation, the “
Offer
”), any and all of its outstanding Securities at the offer price set forth below. The following table sets forth some of the terms of the Offer:
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Securities
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CUSIP
No. / ISIN
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Aggregate
Liquidation
Preference
Outstanding
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Liquidation
Preference Per
Security
(1)
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Offer
Price
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Depositary Shares representing 1/1,000 of a Share of 7.25% Class N Cumulative Convertible Perpetual Preferred Stock of the Company
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49446R 687/
US49446R6870
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$92,422,950
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$50.00
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$62.00 per Security
(2)
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(1)
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As used herein, the term “
Liquidation Preference
” for a Security means an amount equal to the product of the liquidation preference for a share of Class N Preferred Stock ($50,000.00 per share) and the fractional interest in such share of Class N Preferred Stock that such Security represents (1/1,000). For each Security, the Liquidation Preference is $50.00 plus accrued and unpaid dividends, if any, per Security.
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(2)
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Plus accrued and unpaid dividends, if any, for the period from and including the last dividend payment date, to, but not including, the Settlement Date (as defined below).
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Concurrently with the Offer, we also are soliciting consents (the “
Consent Solicitation
”) from (i) holders of the outstanding shares of Class N Preferred Stock (which requires soliciting the holders of the outstanding Securities) to, at any point during the 12-month period beginning on the Expiration Date (as defined below), amend (the “
Preferred
Amendment
”) the charter of the Company (the “
Charter
”) to provide the Company, from and after the effective date of the Preferred Amendment, with the option to redeem the Class N Preferred Stock during the 90 days following the date of effectiveness of the Preferred Amendment at a redemption price for each share of Class N Preferred Stock equal to $60,340.00 (which would mean a redemption price for each Security equal to $60.34), plus accrued and unpaid dividends, if any, for the period from and including the last dividend payment date to, but not including, the redemption date) and (ii) holders of the Securities to amend the Deposit Agreement (as defined below) (the “
Deposit
Agreement Amendment
”) to make corresponding changes to the Deposit Agreement related to the Preferred Amendment, substantially as contemplated on Annex B hereto. Consent from the holders of at least two-thirds of the outstanding shares of Class N Preferred Stock (which corresponds to tenders from holders of two-thirds of the outstanding Securities) (the “
Requisite Preferred Shareholder Consents
”) is required to approve the Preferred Amendment in order to effect the Preferred Amendment, as well as the affirmative vote of the holders of a majority of the outstanding shares of the Company’s common stock, par value $0.01 per share (the “
Common Stock
”), voting as a single class and separate from holders of the Securities (the “
Requisite Common Stockholder Approval
”). Consent from the holders of at least two-thirds of the outstanding Securities is required to approve the Deposit Agreement Amendment (the “
Requisite Deposit Agreement Amendment Approval
” and, together with the Requisite Preferred Shareholder Consents and the Requisite Common Stockholder Approval, the “
Requisite Approvals
”). We plan to solicit the Requisite Common Stockholder Approval from the holders of our Common Stock in support of the Preferred Amendment at the Company’s next annual meeting of stockholders, which is expected to be held in late April or early May of 2025 (the “
2025 Annual Meeting
”), but may do so prior or subsequent to such meeting and may do so more than once during the 12-month effectiveness of the Requisite Preferred Shareholder Consents. The Offer and Consent Solicitation do not constitute a solicitation of consents from holders of our Common Stock to the Preferred Amendment. The solicitation of consents from holders of our Common Stock to the Preferred Amendment is expected to be made pursuant to a definitive proxy statement on Schedule 14A to be filed with the SEC in advance of the 2025 Annual Meeting (the “
2025 Proxy Statement
”).
If the Requisite Approvals are obtained and the Preferred Amendment and Deposit Agreement Amendment are effected, we will have the option to redeem all shares of Class N Preferred Stock (and, consequently, Securities) that remain outstanding following the consummation of the Offer and Consent Solicitation during the 90 days following the date of effectiveness of the Preferred Amendment at the redemption price referred to in the prior paragraph. At such time, the Company’s Board of Directors intends to consider redeeming all shares of Class N Preferred Stock (and, consequently, Securities) that remain outstanding, subject to determining whether a redemption is advisable and in the best interests of the Company. The decision whether or not to redeem shares of Class N Preferred Stock (and, consequently, Securities) that remain outstanding at such time will be based on the price and volume of any recent secondary market sales of the Securities, prevailing interest rates at the time, Company cash on hand and any legal or contractual restrictions on cash distributions to the Company from its subsidiaries, among other factors. As of the date of this Offer to Purchase and Consent Solicitation, the Company has sufficient cash on hand to purchase the maximum number of Securities sought in the Offer, and there are no legal or contractual restrictions on cash distributions from subsidiaries that would limit the purchase of the Securities in the Offer. A copy of the proposed Articles of Amendment effecting the Preferred Amendment (the “
Articles of Amendment
”) is attached hereto as
Annex A
. We urge you to carefully read the Articles of Amendment in its entirety. The filing and effectiveness of the Preferred Amendment is conditioned on obtaining the Requisite Approvals. If we fail to receive the Requisite Approvals during the 12-month period beginning on the Expiration Date, the Preferred Amendment will not be effectuated. If the Preferred Amendment is not effectuated, or if the Company’s Board of Directors determines that a redemption is not advisable and in the best interests of the Company, the Company’s redemption of Securities that remain outstanding following the Offer would not occur and holders may be left holding a highly illiquid security.
See
“Potential Effects on Holders of Securities—Reduced Liquidity and Increased Volatility.”
Following completion of the Offer and Consent Solicitation, the Securities may no longer meet the New York Stock Exchange’s (“
NYSE
”) continued listing criteria for preferred stock, in which case the Securities will be delisted from the NYSE and the Company will file a Form 25 to terminate registration of the Securities under Section 12(b) of the Securities Exchange Act of 1934, as amended (the “
Exchange Act
”).
You must validly tender all Securities that you own in order to participate in the Offer and Consent Solicitation. You may not consent to the Preferred Amendment without tendering your Securities in the Offer and Consent
Solicitation, and you may not tender your Securities for exchange in the Offer and Consent Solicitation without consenting to the Preferred Amendment. The Offer and the Consent Solicitation are conditioned upon receipt of the Requisite Preferred Shareholder Consents, which effectively requires tenders from holders of at least two-thirds of the outstanding shares of Class N Preferred Stock (which corresponds to tenders from holders of two-thirds of the outstanding Securities). The consent to the Preferred Amendment is a part of the Letter of Transmittal and Consent, and holders will be required to deliver to us such consent as a condition to tendering Securities in the Offer. You may revoke your consent to the Preferred Amendment with respect to any Securities you have tendered at any time prior to the Expiration Date only by withdrawing the Securities you have tendered. Following the Expiration Date, assuming the Company’s acceptance for purchase of any and all of your validly tendered and not properly withdrawn Securities, you may not revoke your consent to the Preferred Amendment.
The Securities are traded on the NYSE. The last reported sale price on November 1, 2024 was $60.79.
The Offer Price for the Securities
could be above or below the last reported sale price of the Securities on the Expiration Date.
Holders of Securities should obtain current market quotations for the Securities before deciding whether to tender their Securities and consent to the Preferred Amendment pursuant to the Offer and Consent Solicitation.
THE OFFER AND THE CONSENT SOLICITATION ARE CONDITIONED UPON RECEIPT OF THE REQUISITE PREFERRED SHAREHOLDER CONSENTS, WHICH REQUIRES TENDERS FROM HOLDERS OF AT LEAST TWO-THIRDS OF THE OUTSTANDING SHARES OF CLASS N PREFERRED STOCK (WHICH CORRESPONDS TO TENDERS FROM HOLDERS OF TWO-THIRDS OF THE OUTSTANDING SECURITIES). THE OFFER AND CONSENT SOLICITATION ARE SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 9 WHICH SETS FORTH IN FULL THE CONDITIONS TO THE OFFER AND CONSENT SOLICITATION.
THE COMPANY’S BOARD OF DIRECTORS HAS DETERMINED THAT THE OFFER AND CONSENT SOLICITATION ARE ADVISABLE AND IN THE BEST INTERESTS OF THE COMPANY AND THAT THE OFFER AND CONSENT SOLICITATION ARE FAIR TO HOLDERS OF THE SECURITIES, INCLUDING THE UNAFFILIATED HOLDERS THEREOF, AND HAS DECLARED THE PREFERRED AMENDMENT ADVISABLE AND IS SUBMITTING THE PREFERRED AMENDMENT TO THE HOLDERS OF THE CLASS N PREFERRED STOCK (AND THEREFORE THE HOLDERS OF THE SECURITIES) FOR CONSIDERATION; HOWEVER, NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS, NOR ANY OTHER PERSON, MAKES ANY RECOMMENDATION TO HOLDERS OF SECURITIES AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING THEIR SECURITIES OR TO PROVIDE OR REFRAIN FROM PROVIDING THEIR CONSENT TO THE PREFERRED AMENDMENT IN THE OFFER AND CONSENT SOLICITATION. YOU SHOULD READ CAREFULLY THE INFORMATION IN THIS OFFER TO PURCHASE AND CONSENT SOLICITATION AND IN THE LETTER OF TRANSMITTAL AND CONSENT BEFORE MAKING YOUR DECISION WHETHER TO TENDER YOUR SECURITIES AND TO CONSENT TO THE PREFERRED AMENDMENT IN THE OFFER AND CONSENT SOLICITATION. IN ADDITION, YOU SHOULD CONSULT YOUR OWN TAX, ACCOUNTING, FINANCIAL AND LEGAL ADVISERS AS YOU DEEM APPROPRIATE REGARDING THE TAX, ACCOUNTING, FINANCIAL AND LEGAL CONSEQUENCES OF PARTICIPATING OR DECLINING TO PARTICIPATE IN THE OFFER AND CONSENT SOLICITATION.
This Offer to Purchase and Consent Solicitation has not been approved by the Securities and Exchange Commission (the “
SEC
”) or any state securities commission, nor has the SEC or any state securities commission passed upon the merits or fairness of the Offer and Consent Solicitation or passed upon the adequacy or accuracy of the information contained in this Offer to Purchase and Consent Solicitation and related documents. Any representation to the contrary is a criminal offense. No person has been authorized to give any information or make any representations with respect to the Offer and Consent Solicitation other than the information and representations contained or incorporated by reference herein and, if given or made, such information or representations must not be relied upon as having been authorized.
Neither the delivery of this Offer to Purchase and Consent Solicitation and related documents nor any purchase of Securities by the Company will, under any circumstances, create any implication that the information contained in this Offer to Purchase and Consent Solicitation or in any related document is current as of any time subsequent to the date of such information.
You may direct questions and requests for assistance to J.P. Morgan Securities LLC, the dealer manager (in such capacity, the “
Dealer Manager
”) and consent solicitation agent (in such capacity, the “
Solicitation Agent
”) for the Offer and Consent Solicitation, D.F. King Co., Inc., the information agent (the “
Information Agent
”) for the Offer and Consent Solicitation or Equiniti Trust Company, LLC, the tender agent (the “
Tender Agent
”) for the Offer and Consent Solicitation, at the contact information set forth on the last page of this Offer to Purchase and Consent Solicitation. You may direct requests for additional copies of this Offer to Purchase and Consent Solicitation to the Information Agent and Tender Agent.
In connection with the Offer and Consent Solicitation, our and our affiliates’ officers and other representatives may solicit tenders and consents by use of the mails, personally or by telephone, facsimile, telegram, electronic communication or other similar methods. We will also pay a Soliciting Broker Fee (as defined herein) of $0.25 for each Security that is validly tendered and accepted for purchase pursuant to the Offer and for which a consent has been delivered pursuant to the Consent Solicitation to retail brokers that are appropriately designated by their tendering holder clients to receive this fee; provided that such fee will only be paid with respect to tenders by holders of 10,000 Securities or fewer. We will also pay brokerage houses and other custodians, nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding copies of this Offer to Purchase and Consent Solicitation and related documents to the beneficial owners of the Securities and in handling or forwarding tenders of Securities by their customers.
The Dealer Manager and Solicitation Agent for the Offer and Consent Solicitation is:
J.P. Morgan
The date of this Offer to Purchase and Consent Solicitation is November 4, 2024.
The Offer and Consent Solicitation have certain conditions and no assurance can be given that these conditions will be satisfied.
See
Section 9.
All of the Securities are held in book-entry form through the facilities of The Depository Trust Company (“
DTC
”) and must be tendered through DTC. If you desire to tender Securities, a DTC participant must electronically transmit your acceptance of the applicable Offer and Consent Solicitation through DTC’s Automated Tender Offer Program (“
ATOP
”), for which the transaction will be eligible. In accordance with ATOP procedures, DTC will then verify the acceptance of such Offer and Consent Solicitation and send an agent’s message (as hereinafter defined) to the Tender Agent for its acceptance. An “agent’s message” is a message transmitted by DTC, received by the Tender Agent and forming part of the book-entry confirmation, which states that DTC has received an express acknowledgment from you that you have received the applicable Offer and Consent Solicitation and agree to be bound by the terms of such Offer and Consent Solicitation, and that the Company may enforce such agreement against you. Alternatively, you may also confirm your acceptance of the Offer and Consent Solicitation by delivering to the Tender Agent a duly executed Letter of Transmittal and Consent. A tender will be deemed to have been received only when the Tender Agent receives (i) either a duly completed agent’s message through the facilities of DTC at the Tender Agent’s DTC account or a properly completed Letter of Transmittal and Consent, and (ii) confirmation of book-entry transfer of the Securities into the Tender Agent’s applicable DTC account. If your Securities are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, you should contact that person if you desire to tender your Securities.
See
Section 6.
There are no guaranteed delivery procedures available with respect to the Offer and Consent Solicitation under the terms of this Offer to Purchase and Consent Solicitation or any related materials. Holders must tender their Securities and consent to the Preferred Amendment in accordance with the procedures set forth in this Offer to Purchase and Consent Solicitation.
See
Section 6.
The Company’s Board of Directors has determined that the Offer and Consent Solicitation are advisable and in the best interests of the Company and that the Offer and Consent Solicitation are fair to holders of the Securities, including the unaffiliated holders thereof, and has declared the Preferred Amendment advisable and is submitting the Preferred Amendment to the holders of the Class N Preferred Stock (and therefore the holders of the Securities) for consideration; however, neither the Company nor its Board of Directors, nor any other person, makes any recommendation to holders of Securities as to whether to tender or refrain from tendering their Securities or to provide or refrain from providing their consent to the Preferred Amendment in the Offer and Consent Solicitation. You should read carefully the information in this Offer to Purchase and Consent Solicitation before making your decision whether to tender your Securities and to consent to the Preferred Amendment. The Company has not authorized any person to make any recommendation on its behalf as to whether you should tender or refrain from tendering your Securities or provide or refrain from providing your consent to the Preferred Amendment in the Offer and Consent Solicitation. The Company has not authorized any person to give any information or to make any representation in connection with respect to the Offer and Consent Solicitation other than those contained in this Offer to Purchase and Consent Solicitation or in the Letter of Transmittal and Consent. If given or made, you must not rely upon any such information or representation as having been authorized by the Company, the Information Agent and Tender Agent or the Dealer Manager and Solicitation Agent. You must make your own decision whether to tender your Securities and whether to consent to the Preferred Amendment.
The Company is not making the Offer and Consent Solicitation to (nor will it accept any tender of Securities from or on behalf of) any holders of Securities in any jurisdiction in which the making of the Offer and Consent Solicitation or the acceptance of any tender of Securities would not be in compliance with the laws of such jurisdiction, provided that we will comply with the requirements of Rule 13e-4(f)(8) promulgated under the Exchange Act. However, the Company may, at its discretion, take such action as the Company may deem necessary for it to make the Offer and Consent Solicitation in any such jurisdiction and extend the Offer and Consent Solicitation to holders of Securities in such jurisdiction. In any jurisdiction the securities or blue sky laws of which require the Offer and Consent Solicitation to be made by a licensed broker or dealer, the Offer and Consent Solicitation shall be deemed to be made on the Company’s behalf by one or more registered brokers or dealers which are licensed under the laws of such jurisdiction.
THIS OFFER TO PURCHASE AND CONSENT SOLICITATION AND THE LETTER OF TRANSMITTAL AND CONSENT CONTAIN IMPORTANT INFORMATION THAT HOLDERS ARE URGED TO READ BEFORE MAKING ANY DECISION WITH RESPECT TO THE OFFER AND CONSENT SOLICITATION.
i
When used in this Offer to Purchase and Consent Solicitation or any related document and in public stockholder communications, in other documents of the Company filed with or furnished to the SEC, or in oral statements made with the approval of an authorized executive officer, the words “believe,” “expect,” “intend,” “commit,” “anticipate,” “estimate,” “project,” “will,” “target,” “plan,” “forecast” and similar expressions are intended to identify forward-looking statements. There are a number of important factors that could cause the results of the Company to differ materially from those indicated by such forward-looking statements, including but not limited to the following. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date made. By their nature, these statements are subject to numerous uncertainties that could cause actual results to differ materially from those anticipated in the statements.
Factors which may cause actual results to differ materially from current expectations include, but are not limited to, the following:
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general adverse economic and local real estate conditions;
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the impact of competition, including the availability of acquisition or development opportunities and the costs associated with purchasing and maintaining assets;
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the inability of major tenants to continue paying their rent obligations due to bankruptcy, insolvency or a general downturn in their business;
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the reduction in the Company’s income in the event of multiple lease terminations by tenants or a failure of multiple tenants to occupy their premises in a shopping center;
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the potential impact of e-commerce and other changes in consumer buying practices, and changing trends in the retail industry and perceptions by retailers or shoppers, including safety and convenience;
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the availability of suitable acquisition, disposition, development and redevelopment opportunities, and the costs associated with purchasing and maintaining assets and risks related to acquisitions not performing in accordance with our expectations;
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the Company’s ability to raise capital by selling its assets;
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disruptions and increases in operating costs due to inflation and supply chain disruptions;
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risks associated with the development of mixed-use commercial properties, including risks associated with the development, and ownership of non-retail real estate;
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changes in governmental laws and regulations, including, but not limited to, changes in data privacy, environmental (including climate change), safety and health laws, and management’s ability to estimate the impact of such changes;
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the Company’s failure to realize the expected benefits of the RPT Merger;
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the risk of litigation, including shareholder litigation, in connection with the RPT Merger, including any resulting expense;
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risks related to future opportunities and plans for the combined company, including the uncertainty of expected future financial performance and results of the combined company;
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the possibility that, if the Company does not achieve the perceived benefits of the RPT Merger as rapidly or to the extent anticipated by financial analysts or investors, the market price of the Common Stock could decline;
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valuation and risks related to the Company’s joint venture and preferred equity investments and other investments;
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valuation of marketable securities;
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impairment charges;
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criminal cybersecurity attacks disruption, data loss or other security incidents and breaches;
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risks related to artificial intelligence;
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ii
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impact of natural disasters and weather and climate-related events;
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pandemics or other health crises;
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our ability to attract, retain and motivate key personnel;
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financing risks, such as the inability to obtain equity, debt or other sources of financing or refinancing on favorable terms to the Company;
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the level and volatility of interest rates and management’s ability to estimate the impact thereof;
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changes in the dividend policy for the Company’s common and preferred stock and the Company’s ability to pay dividends at current levels;
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unanticipated changes in the Company’s intention or ability to prepay certain debt prior to maturity and/or hold certain securities until maturity; and
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the Company’s ability to continue to maintain its status as a REIT (as defined below) for U.S. federal income tax purposes and potential risks and uncertainties in connection with its UPREIT (as defined below) structure.
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This list of risks is not exhaustive. Additional information regarding risk factors that may affect us is discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 26, 2024, which is incorporated by reference herein.
See
Section 19. In light of the significant uncertainties inherent in the forward-looking statements included or incorporated by reference herein, the inclusion of such information should not be regarded as a representation by us or any other person that our objectives and plans will be achieved. Moreover, we assume no obligation to update these forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting such forward-looking statements, except as required by law.
iii
iv
We are providing this summary term sheet for your convenience. It highlights material information in this Offer to Purchase and Consent Solicitation, but it does not describe all of the details of the Offer and Consent Solicitation to the same extent described in this Offer to Purchase and Consent Solicitation. You should read the entire Offer to Purchase and Consent Solicitation and the Letter of Transmittal and Consent because they contain the full details of the Offer and Consent Solicitation. We have included references to the sections of this Offer to Purchase and Consent Solicitation where you will find a more complete discussion.
The Offeror
The Offer and Consent Solicitation are being made by Kimco Realty Corporation, a Maryland corporation. The Company is North America’s largest publicly traded owner and operator of open-air, grocery-anchored shopping centers, including mixed-use assets. Our mission is to create destinations for everyday living that inspire a sense of community and deliver value to our many stakeholders. The Company’s principal executive offices are located at 500 North Broadway, Suite 201, Jericho, New York, 11753, and its telephone number is (516) 869-9000.
Terms of the Offer and Consent Solicitation
We are offering to purchase for cash, upon the terms and subject to the conditions set forth in this Offer to Purchase and Consent Solicitation and the Letter of Transmittal and Consent, any and all of the Securities. Below is a table that shows the Offer Price for each Security.
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Securities
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Liquidation
Preference
Per
Security
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Offer Price
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Depositary Shares representing 1/1,000 of a Share of 7.25% Class N Cumulative Convertible Perpetual Preferred Stock (NYSE: KIMprN)
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$50.00
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$62.00 per Security, plus accrued and unpaid dividends, if any, for the period from and including the last dividend payment date, to, but not including, the Settlement Date
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1
option to redeem the Class N Preferred Stock during the 90 days following the date of effectiveness of the Preferred Amendment at a redemption price for each share of Class N Preferred Stock equal to $60,340.00 (which would mean a redemption price for each Security equal to $60.34), plus accrued and unpaid dividends, if any, for the period from and including the last dividend payment date to, but not including, the redemption date) and (ii) holders of the Securities to amend the Deposit Agreement to make corresponding changes to the Deposit Agreement related to the Preferred Amendment. In addition to the Requisite Preferred Shareholder Consents, the Requisite Common Stockholder Approval is required to approve the Preferred Amendment in order to effect the Preferred Amendment. The Requisite Deposit Agreement Amendment Approval, in addition to approval by the Company and the Depositary, is required to approve the Deposit Agreement Amendment. We plan to solicit the Requisite Common Stockholder Approval from the holders of our Common Stock in support of the Preferred Amendment at the 2025 Annual Meeting, but may do so prior or subsequent to such meeting and may do so more than once during the 12-month effectiveness of the Requisite Preferred Shareholder Consents. The Offer and Consent Solicitation do not constitute a solicitation of consents from holders of our Common Stock to the Preferred Amendment. The solicitation of consents from holders of our Common Stock to the Preferred Amendment is expected to be made pursuant to the 2025 Proxy Statement.
If the Requisite Approvals are obtained and the Preferred Amendment and Deposit Agreement Amendment are effected, we will have the option to redeem all shares of Class N Preferred Stock (and, consequently, Securities) that remain outstanding following the consummation of the Offer and Consent Solicitation during the 90 days following the date of effectiveness of the Preferred Amendment at the redemption price referred to in the prior paragraph. At such time, the Company’s Board of Directors intends to consider redeeming all shares of Class N Preferred Stock (and, consequently, Securities) that remain outstanding, subject to determining whether a redemption is advisable and in the best interests of the Company. The decision whether or not to redeem shares of Class N Preferred Stock (and, consequently, Securities) that remain outstanding at such time will be based on the price and volume of any recent secondary market sales of the Securities, prevailing interest rates at the time, Company cash on hand, among other factors. As of the date of this Offer to Purchase and Consent Solicitation, the Company has sufficient cash on hand to purchase the maximum number of Securities sought in the Offer, and there are no legal or contractual restrictions on cash distributions from subsidiaries that would limit the purchase of the Securities in the Offer.
A copy of the proposed Articles of Amendment effecting the Preferred Amendment is attached hereto as
Annex A
. We urge you to carefully read the Articles of Amendment in its entirety. The filing and effectiveness of the Preferred Amendment is conditioned on obtaining the Requisite Approvals. If we fail to receive the Requisite Approvals during the 12-month period beginning on the Expiration Date, the Preferred Amendment will not be effectuated. If the
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Preferred Amendment is not effectuated, or if the Company’s Board of Directors determines that a redemption is not advisable and in the best interests of the Company, the Company’s redemption of Securities that remain outstanding following the Offer would not occur and holders may be left holding a highly illiquid security.
See
“Potential Effects on Holders of Securities—Reduced Liquidity and Increased Volatility.”
Following completion of the Offer and Consent Solicitation, the Securities may no longer meet the NYSE’s continued listing criteria for preferred stock, in which case the Securities will be delisted from the NYSE and the Company will file a Form 25 to terminate registration of the Securities under Section 12(b) of the Exchange Act.
You must validly tender all Securities that you own in order to participate in the Offer and Consent Solicitation. You may not consent to the Preferred Amendment without tendering your Securities in the Offer and Consent Solicitation, and you may not tender your Securities for exchange in the Offer and Consent Solicitation without consenting to the Preferred Amendment. The Offer and the Consent Solicitation are conditioned upon receipt of the Requisite Preferred Shareholder Consents, which effectively requires tenders from holders of at least two-thirds of the outstanding shares of Class N Preferred Stock (which corresponds to tenders from holders of two-thirds of the outstanding Securities). The consent to the Preferred Amendment is a part of the Letter of Transmittal and Consent, and holders will be required to deliver to us such consent as a condition to tendering Securities in the Offer. You may revoke your consent to the Preferred Amendment with respect to any Securities you have tendered at any time prior to the Expiration Date only by withdrawing the Securities you have tendered. Following the Expiration Date, assuming the Company’s acceptance for purchase of any and all your validly tendered and not properly withdrawn Securities, you may not revoke your consent to the Preferred Amendment.
The Offer and the Consent Solicitation are conditioned upon receipt of the Requisite Preferred Shareholder Consents. The Offer and Consent Solicitation are subject to certain other conditions.
See
Section 9.
Source and Amount of Funds
The Company expects to use cash on hand, including borrowings under the Company’s Revolving Credit Facility (as defined below), to pay the consideration payable by it pursuant to the Offer and Consent Solicitation and the fees and expenses incurred by it in connection therewith.
Immediately prior to the consummation of the Offer and the subsequent surrender of the Securities by the Company to the depositary in exchange for shares of Class N Preferred Stock, Kimco OP (as defined below) shall purchase from the Company an equal number of Class N Preferred Units of Kimco OP as the number of shares of Class N Preferred Stock to be purchased by the Company in the Offer, upon the same terms and for the same price per Class N Preferred Unit of Kimco OP as the price per share of Class N Preferred Stock (based on the price for the Securities and the applicable exchange rate for the Securities).
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Time to Tender and Consent
You may tender your Securities until the Offer and Consent Solicitation expires.
The Offer and Consent Solicitation will expire at 5:00 p.m., New York City time on December 4, 2024, unless the Company extends them (such time and date, as the same may be extended, the “
Expiration Date
”).
See
Section 5.
The Company may choose to extend the Offer and Consent Solicitation for any reason, subject to applicable laws. The Company cannot assure you that it will extend the Offer and Consent Solicitation or, if it does, of the length of any extension that it may provide.
See
Section 16.
You may revoke your consent to the Preferred Amendment with respect to any Securities you have tendered at any time prior to the Expiration Date only by withdrawing the Securities you have tendered. Following the Expiration Date, assuming the Company’s acceptance for purchase of any and all your validly tendered and not properly withdrawn Securities, you may not revoke your consent to the Preferred Amendment.
If a broker, dealer, commercial bank, trust company or other nominee holds your Securities, it may have an earlier deadline for you to act to instruct it to accept the Offer and provide your consent to the Preferred Amendment on your behalf. You should contact the broker, dealer, commercial bank, trust company or other nominee to determine its deadline.
Fairness of the Offer
On October 28, 2024, our Board of Directors determined that the Offer and Consent Solicitation are advisable and in the best interests of the Company and determined that the Offer and Consent Solicitation are fair to the holders of the Securities, including the unaffiliated holders of the Securities. See “Special Factors, Section 3. Fairness of the Offer and Consent Solicitation.”
Extension, Amendment, and Termination of the Offer and Consent Solicitation
The Company reserves the right to extend or amend the Offer and Consent Solicitation in its sole discretion. If the Company extends the Offer and Consent Solicitation, it will delay the acceptance of any Securities that have been tendered. The Company reserves the right to terminate the Offer and Consent Solicitation under certain circumstances.
See
Section 9 and Section 16.
The Company will issue a press release by 9:00 a.m., New York City time, on the business day after the scheduled Expiration Date if it decides to extend the Offer and Consent Solicitation. The Company will announce any amendment to the Offer and Consent Solicitation by making a public announcement of the amendment.
See
Section 16.
Purpose of the Offer and Consent Solicitation
The principal purpose of the Offer and Consent Solicitation is to provide liquidity to holders of the Securities at a premium to recent market prices and where trading volumes in the Securities have historically been minimal. The Offer and Consent Solicitation also represent an opportunity for the Company to simplify its capital structure.
See
Section 1.
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Conditions of the Offer
and Consent Solicitation
The Offer and the Consent Solicitation are conditioned upon receipt of the Requisite Preferred Shareholder Consents, which effectively requires tenders from holders of at least two-thirds of the outstanding shares of Class N Preferred Stock (which corresponds to tenders from holders of two-thirds of the outstanding Securities). The consent to the Preferred Amendment is a part of the Letter of Transmittal and Consent, and holders will be required to deliver to us such consent as a condition to tendering Securities in the Offer. The Offer and Consent Solicitation are subject to certain other conditions, including, among others, the absence of court and governmental action prohibiting, challenging or restricting the Offer and Consent Solicitation. The conditions to the Offer and Consent Solicitation are for the sole benefit of the Company and may be asserted by the Company, regardless of the circumstances giving rise to any such condition (other than any actions or inactions of the Company). The Company reserves the right, in its sole discretion, to waive any and all conditions of the Offer and Consent Solicitation prior to the Expiration Date.
See
Section 9.
Procedures for Tendering Securities
The Offer and Consent Solicitation will expire on the Expiration Date, which is at 5:00 p.m. New York City time on December 4, 2024, unless the Company extends or earlier terminates the Offer and Consent Solicitation. To tender your Securities prior to the expiration of the Offer and Consent Solicitation, you must electronically transmit your acceptance of the applicable Offer and Consent Solicitation through ATOP, which is maintained by DTC, and by which you will agree to be bound by the terms and conditions set forth in the applicable Offer and Consent Solicitation, or deliver to the Tender Agent a duly executed Letter of Transmittal and Consent.
A tender will be deemed to be received after you have expressly agreed to be bound by the terms of the Offer and Consent Solicitation, which is accomplished by the transmittal of an agent’s message to the Tender Agent by DTC in accordance with ATOP procedures, or by delivery to the Tender Agent of a duly executed Letter of Transmittal and Consent. You should contact the Information Agent for assistance at the contact information listed on the last page of this Offer to Purchase and Consent Solicitation. Please note that the Company will not purchase your Securities in the Offer and Consent Solicitation unless the Tender Agent receives the required confirmation prior to the Expiration Date. If a broker, dealer, commercial bank, trust company or other nominee holds your Securities, it is likely that it has an earlier deadline for you to act to instruct it to accept the Offer and provide your consent to the Preferred Amendment on your behalf.
We recommend that you contact your broker, dealer, commercial bank, trust company or other nominee to determine its applicable deadline.
See
Section 6.
The Securities may be tendered and accepted only in whole shares. No alternative, conditional or contingent tenders will be accepted. We have no obligation to accept Securities that are not validly tendered in the Offer and Consent Solicitation before the Expiration Date.
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There are no guaranteed delivery procedures available with respect to the Offer
and Consent Solicitation under the terms of this Offer to Purchase and Consent Solicitation or any related materials. Holders must tender their Securities and consent to the Preferred Amendment in accordance with the procedures set forth in this Offer to Purchase and Consent Solicitation.
See
Section 6.
Withdrawal Rights
You may withdraw any Securities you have tendered at any time before the Expiration Date, which will occur at 5:00 p.m., New York City time on December 4, 2024, unless the Company extends the Offer and Consent Solicitation. The Company cannot assure you that it will extend the Offer and Consent Solicitation or, if it does, of the length of any extension it may provide.
See
Section 7.
You may revoke your consent to the Preferred Amendment with respect to any Securities you have tendered at any time prior to the Expiration Date only by withdrawing the Securities you have tendered. Following the Expiration Date, assuming the Company’s acceptance for purchase of any and all your validly tendered and not properly withdrawn Securities, you may not revoke your consent to the Preferred Amendment.
Subject to the conditions of the Offer and Consent Solicitation, on the Settlement Date, the Company will accept for purchase any and all validly tendered and not properly withdrawn Securities. The Company expects the Settlement Date to promptly follow the Expiration Date, unless extended pursuant to the Offer and Consent Solicitation.
Withdrawal Procedure
You must deliver, on a timely basis prior to the Expiration Date, a written notice of your withdrawal, or a properly transmitted “Request Message” through ATOP, to the Tender Agent at the address appearing on the last page of this Offer to Purchase and Consent Solicitation. Your notice of withdrawal must specify your name, the number of Securities to be withdrawn and the name of the registered holder of those Securities. Some additional requirements apply for Securities that have been tendered under the procedure for book-entry transfer set forth in Section 6.
See
Section 7.
No Recommendation as to Whether to Tender or Provide Consent
The Company’s Board of Directors has determined that the Offer and Consent Solicitation are advisable and in the best interests of the Company and that the Offer and Consent Solicitation are fair to holders of the Securities, including the unaffiliated holders thereof, and has declared the Preferred Amendment advisable and is submitting the Preferred Amendment to the holders of the Class N Preferred Stock (and therefore the holders of the Securities) for consideration; however, neither the Company nor its Board of Directors, nor any other person, makes any recommendation to holders of Securities as to whether to tender or refrain from tendering their Securities or to provide or refrain from providing their consent to the Preferred Amendment in the Offer and Consent Solicitation. You should read carefully the information in this Offer to Purchase and Consent Solicitation before making your decision whether to tender your Securities and to consent to the Preferred Amendment.
See
Section 20.
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Untendered or Unpurchased Securities
Any tendered Securities that are not accepted for purchase by the Company will be returned without expense to their tendering holder and the related consent to the Preferred Amendment will be revoked. Securities not tendered or otherwise not purchased pursuant to the Offer and Consent Solicitation will remain outstanding. We have no obligation to accept Securities that are not validly tendered in the Offer and Consent Solicitation before the Expiration Date. If the Requisite Approvals are obtained and the Preferred Amendment and Deposit Agreement Amendment are effected, the Company will have the option to redeem all Securities that remain outstanding following the consummation of the Offer and Consent Solicitation during the 90 days following the date of effectiveness of the Preferred Amendment at a redemption price for each share of Class N Preferred Stock equal to $60,340.00 (which would mean a redemption price for each Security equal to $60.34), plus accrued and unpaid dividends, if any, for the period from and including the last dividend payment date to, but not including, the redemption date).
See
Section 1.
Market Price of the Securities
The Securities are traded on the NYSE. The last reported sale price on November 1, 2024 was $60.79.
As of November 1, 2024, the average daily trading volume for the Securities since January 2, 2024, the initial issue date of the Securities, was 4,154, and the 20-day average daily trading volume for the Securities was 2,133.
The Offer Price for the Securities could be above or below the last reported sale price of the Securities on the Expiration Date. Holders of Securities should obtain current market quotations for the Securities before deciding whether to tender their Securities and consent to the Preferred Amendment pursuant to the Offer and Consent Solicitation.
Based upon the last reported trading price, it is unlikely that holders of the Securities would convert their Securities into Common Stock at the current exchange ratio of 2.3071 shares of Common Stock for each Security pursuant to the terms of the Class N Preferred Stock and the Charter. The exchange ratio is subject to increase in the event our quarterly common equity dividend were to exceed $0.27 per share. We believe that the Offer and Consent Solicitation set forth in this Offer to Purchase and Consent Solicitation will allow all holders of the Securities to receive a premium to recent market prices for the Securities where trading volumes in the Securities have historically been minimal.
See
Section 10.
Appraisal Rights
You will have no appraisal rights in connection with the Offer and Consent Solicitation.
Time of Payment
The Company will pay the purchase price to you in cash for the Securities it purchases promptly after the Expiration Date and the acceptance of the Securities for purchase. We refer to the date on which such payment is made as the “
Settlement Date
.” The Company expects the Settlement Date to promptly follow the Expiration Date.
See
Section 8.
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Payment of Brokerage Commissions
If you are a registered holder of Securities and you tender your Securities directly to the Tender Agent, you will not incur any brokerage commissions. If you hold Securities through a broker, dealer, commercial bank, trust company or other nominee, we recommend that you consult your broker, dealer, commercial bank, trust company or other nominee to determine whether transaction costs are applicable.
See
Section 6.
Soliciting Broker Fee
The Company will pay a soliciting broker fee (the “
Soliciting
Broker Fee
”) of $0.25 for each Security that is validly tendered and accepted for purchase pursuant to the Offer and for which consents have been delivered pursuant to the Consent Solicitation to retail brokers that are appropriately designated by their tendering holder clients to receive this fee; provided that such fee will only be paid with respect to tenders by holders of 10,000 Securities or fewer.
Certain U.S. Federal Income Tax Consequences of the Offer
The cash received in exchange for tendered Securities generally will be treated for U.S. federal income tax purposes either as (i) consideration received with respect to a sale or exchange of the tendered Securities, or (ii) a distribution from the Company in respect of its stock, depending on the particular circumstances of each holder of Securities.
See
Section 15 for a more detailed discussion.
Holders of the Securities should consult their tax advisors to determine the particular tax consequences to them of participating in the Offer and Consent Solicitation, including the applicability and effect of any state, local or non-U.S. tax laws.
Payment of Stock Transfer Tax
If you are the registered holder and you instruct the Tender Agent to make the payment for the Securities directly to you, then generally you will not incur any stock transfer tax. See Section 8.
Dealer Manager
and Solicitation Agent
The Dealer Manager and Solicitation Agent for the Offer and Consent Solicitation is J.P. Morgan Securities LLC.
The Company will pay the Dealer Manager and Solicitation Agent fees.
See
Section 17.
See the last page of this Offer to Purchase and Consent Solicitation for additional information about the Dealer Manager and Solicitation Agent.
Information and Tender Agent
The Information Agent is D.F. King Co., Inc., and the Tender Agent is Equiniti Trust Company, LLC.
See
Section 20.
See the last page of this Offer to Purchase and Consent Solicitation for additional information about the Information Agent and the Tender Agent.
Further Information
You may call the Dealer Manager and Solicitation Agent with questions regarding the terms of the Offer and Consent Solicitation or the Information Agent and the Tender Agent with questions regarding how to tender and/or request additional copies of this Offer to Purchase and Consent Solicitation, the Letter of Transmittal and Consent or other documents related to the Offer and Consent Solicitation.
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Purpose of and Reasons for the Offer and Consent Solicitation.
|
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The Offer and Consent Solicitation constitute post-closing optimization of the Company’s capital structure following the Company’s acquisition of RPT in January of 2024. The Company was required to issue the Securities to holders of similar securities of RPT in connection with the acquisition. This Offer and Consent Solicitation is intended to rationalize and optimize the Company’s capital structure as soon as practicable following the acquisition of RPT.
The Board of Directors has determined that the Offer and Consent Solicitation are advisable and in the best interests of the Company and that the Offer and Consent Solicitation are fair to holders of the Securities, including the unaffiliated holders thereof, and has declared the Preferred Amendment advisable and is submitting the Preferred Amendment to the holders of the Class N Preferred Stock (and therefore the holders of the Securities) for consideration; however, neither the Company nor its Board of Directors, nor any other person, including the Dealer Manager, Information Agent and Tender Agent, has made, and they are not making, any recommendation to you as to whether to tender or refrain from tendering your Securities or to provide or refrain from providing your consent to the Preferred Amendment in the Offer and Consent Solicitation. We have not authorized any person to make any such recommendation. You must make your own decision as to whether to tender your Securities and provide your consent to the Preferred Amendment in the Offer and Consent Solicitation. In doing so, you should read carefully the information contained in, or incorporated by reference in, this Offer to Purchase and Consent Solicitation and in the Letter of Transmittal and Consent, including the purposes and effects of the Offer and Consent Solicitation. You are urged to discuss your decisions with your own tax advisor, financial advisor and/or broker.
The Company does not believe, after reasonable inquiry, that any of the Company’s affiliates or its directors or executive officers own the Securities and thus does not believe, after reasonable inquiry, that any such persons will tender the Securities in connection with the Offer and Consent Solicitation.
The Company does not presently know, after reasonable inquiry, whether any of the Company’s directors, executive officers or affiliates have made any recommendation either in support of or opposed to the Offer and Consent Solicitation other than as expressly set forth in this Offer to Purchase and Consent Solicitation.
|
Certain Effects of the Offer and Consent Solicitation.
|
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would be mean a redemption price for each Security equal to $60.34, plus accrued and unpaid dividends, if any, for the period from and including the last dividend payment date to, but not including, the date of redemption).
If the Requisite Approvals are obtained and the Preferred Amendment and Deposit Agreement Amendment are effected, we will have the option to redeem all Securities that remain outstanding following the consummation of the Offer and Consent Solicitation during the 90 days following the date of effectiveness of the Preferred Amendment at the redemption price referred to in the prior paragraph. At such time, the Company’s Board of Directors intends to consider redeeming all shares of Class N Preferred Stock (and, consequently, Securities) that remain outstanding, subject to determining whether a redemption is advisable and in the best interests of the Company. The decision whether or not to redeem shares of Class N Preferred Stock (and, consequently, Securities) that remain outstanding at such time will be based on the price and volume of any recent secondary market sales of the Securities, prevailing interest rates at the time, Company and Company cash on hand, among other factors. As of the date of this Offer to Purchase and Consent Solicitation, the Company has sufficient cash on hand to purchase the maximum number of Securities sought in the Offer, and there are no legal or contractual restrictions on cash distributions from subsidiaries that would limit the purchase of the Securities in the Offer. A copy of the proposed Articles of Amendment effecting the Preferred Amendment is attached hereto as Annex A. We urge you to carefully read the Articles of Amendment in its entirety. The filing and effectiveness of the Preferred Amendment is conditioned on obtaining the Requisite Approvals. If we fail to receive the Requisite Approvals during the 12-month period beginning on the Expiration Date, the Preferred Amendment will not be effectuated. If the Preferred Amendment is not effectuated, or if the Company’s Board of Directors determines that a redemption is not advisable and in the best interests of the Company, the Company’s redemption of Securities that remain outstanding following the Offer would not occur and holders may be left holding a highly illiquid security.
See
“—Reduced Liquidity and Increased Volatility” below.
Following completion of the Offer and Consent Solicitation, the Securities may no longer meet the NYSE’s continued listing criteria for preferred stock, in which case the Securities will be delisted from the NYSE and the Company will file a Form 25 to terminate registration of the Securities under Section 12(b) of the Exchange Act.
You must validly tender all Securities that you own in order to participate in the Offer and Consent Solicitation. You may not consent to the Preferred Amendment without tendering your Securities in the Offer and Consent Solicitation, and you may not tender your Securities for exchange in the Offer and Consent Solicitation without consenting to the Preferred Amendment. The Offer and the Consent Solicitation are conditioned upon receipt of the Requisite Preferred Shareholder Consents, which effectively requires tenders from holders of at least two-thirds of the outstanding shares of Class N Preferred Stock (which corresponds to tenders from holders of two-thirds of the outstanding Securities). The consent to the Preferred Amendment is a part of the Letter of Transmittal and Consent, and holders will be required to deliver to us such consent as a condition to tendering Securities in the Offer. You may revoke your consent to the Preferred Amendment with respect to any Securities you have tendered at any time prior to the Expiration Date only by withdrawing the Securities you have tendered. Following the Expiration Date, assuming the Company’s acceptance for purchase of any and all your validly tendered and not properly withdrawn Securities, you may not revoke your consent to the Preferred Amendment.
Future Economic Position.
There is no guarantee that tendering your Securities and consenting to the Preferred Amendment in the Offer and Consent Solicitation will put you in a better future economic position. We can give no assurance as to the market value of our Securities in the future. If you choose to tender your Securities for exchange in the Offer and consent to the Preferred Amendment, future events may cause an increase of the market price of our Securities, which may result in a lower value realized by participating in the Offer and Consent Solicitation than you might have realized if you did not tender your Securities and consent to the Preferred Amendment. Similarly, if you do not tender your Securities and consent to the Preferred Amendment in the Offer and Consent Solicitation, there can be no assurance that you can sell your Securities in the future at a value equal to or higher than would have been obtained by participating in the Offer and Consent Solicitation. Furthermore, if the Preferred Amendment and Deposit Agreement Amendment are effected, we will have the option to redeem all shares of Class N Preferred Stock (and, consequently, Securities) that remain outstanding following the consummation of the Offer and Consent Solicitation during the 90 days following the date of effectiveness of the Preferred Amendment at a redemption price for each share of Class N Preferred Stock equal to $60,340.00 (which would mean a redemption price for each Security equal to $60.34), plus accrued and unpaid dividends, if any, for the period from and including the last dividend payment date to, but not including, the redemption date).
Loss of Any Future Benefits Associated with the Securities.
Holders of the Securities who tender their Securities and consent to the Preferred Amendment in the Offer and Consent Solicitation and whose Securities are accepted and
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purchased by the Company will no longer have any rights and benefits with respect to those Securities, including the right to receive future distributions with respect to any Securities tendered. Holders of our Securities are entitled to receive, when, as and if declared by the Board of Directors out of any funds legally available therefor, cumulative dividends on the liquidation preference. Future benefits could also include payments made to the holder of the Securities (i) upon any liquidation of the Company or (ii) at the election of the Company, to the extent permitted by the terms of the Charter and applicable law, voluntary repurchase by the Company of the Securities at a price agreed upon by the Company and the selling holder of Securities, in each case, at the Liquidation Preference of $50.00 plus accrued and unpaid dividends, if any, per Security.
Holders of the Securities who choose to participate in the Offer and Consent Solicitation by tendering Securities and consenting to the Preferred Amendment will only receive the cash payment of $62.00 per share, plus accrued and unpaid dividends, if any, for the period from and including the last dividend payment date, to, but not including, the Settlement Date, less any applicable withholding taxes, and will lose the right to receive any accrued and unpaid dividends, if any, thereon and all future distributions with respect to such tendered Securities. We have declared a quarterly dividend on the Class N Preferred Stock to be paid on the Dividend Payment Date to shareholders of record on the Dividend Record Date. Holders of Securities who validly tender their Securities (and whose Securities are accepted for purchase by the Company) in the Offer will receive accrued and unpaid dividends, if any, for the period from and including the last dividend payment date, to, but not including, the Settlement Date, unless the Settlement Date occurs on or following the Dividend Record Date and prior to the Dividend Payment Date (in which case accrued and unpaid dividends related to the Declared Dividend will not be paid to tendering holders on the Settlement Date and the Declared Dividend will be paid to holders of record on the Dividend Record Date). At the time you tender your Securities, you will not know the extent of participation by other holders of Securities in the Offer and Consent Solicitation.
In addition, if the Preferred Amendment and Deposit Agreement Amendment are approved, we will have the option to redeem all shares of Class N Preferred Stock (and, consequently, Securities) that remain outstanding following the consummation of the Offer and Consent Solicitation during the 90 days following the date of effectiveness of the Preferred Amendment at a redemption price for each share of Class N Preferred Stock equal to $60,340.00 (which would mean a redemption price for each Security equal to $60.34), plus accrued and unpaid dividends, if any, for the period from and including the last dividend payment date to, but not including, the redemption date).
Loss of Conversion Rights
. Holders of Securities currently have the right, at their option and subject to the terms, conditions and adjustments set forth in the terms of the Class N Preferred Stock in the Charter, to convert some or all of their outstanding Securities to Common Stock. Holders who tender their Securities and consent to the Preferred Amendment in the Offer and Consent Solicitation will not be able to convert such Securities unless such holders of Securities withdraw their Securities tendered prior to the Expiration Date. Holders who do not tender their Securities and consent to the Preferred Amendment in the Offer and Consent Solicitation will continue to have the right to convert their Securities in accordance with the terms of the Class N Preferred Stock in the Charter.
Tax Consequences.
Holders whose Securities are accepted and purchased by the Company in this Offer to Purchase and Consent Solicitation may also incur tax liability (including possible U.S. federal withholding or backup withholding) with respect to the sale of their Securities. Given the absence of definitive authority as to the tax treatment of the payment for Securities purchased absent a complete termination of such holder’s interest in the Company, the tax consequences to any such holders whose Securities are so accepted and purchased will depend upon the facts and circumstances of each such holder’s specific situation.
See
Section 15.
Reduction in Outstanding Securities.
The Securities purchased by the Company in the Offer will be retired and the underlying preferred stock, fractional interests in which such Securities represent, will be retired and returned to the status of authorized but unissued shares of the Company’s preferred stock, without designation as to class or series.
Reduced Liquidity and Increased Volatility.
Equity securities that have a small number of issued securities and a small number of holders have less liquidity, more volatile trading and may attract lower prices than comparable equity securities with a greater float and more holders. Any purchase of Securities in the Offer will reduce the number of Securities that trade publicly and will likely reduce the number of holders and beneficial owners of Securities. Therefore, the market price for Securities that are not tendered and purchased in the Offer may be lower and more volatile. If the Offer is completed, there can be no assurance that any trading market will exist for the Securities. To
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the extent a market continues to exist after completion of the Offer, the Securities may trade at a discount compared to current values. We can give no assurance, however, as to the price at which a holder of Securities may be able to sell his, her or its Securities in the future, if at all. The Securities are perpetual and there is no fixed date on which we are required to redeem or otherwise repurchase the Securities. In addition, no holder of Securities has the right to require the Company to redeem the Securities. If the Preferred Amendment and Deposit Agreement Amendment are effected, we will have the option to redeem all shares of Class N Preferred Stock (and, consequently, Securities) that remain outstanding following the consummation of the Offer and Consent Solicitation during the 90 days following the date of effectiveness of the Preferred Amendment at a redemption price for each share of Class N Preferred Stock equal to $60,340.00 (which would mean a redemption price for each Security equal to $60.34), plus accrued and unpaid dividends, if any, for the period from and including the last dividend payment date to, but not including, the redemption date).
Third-party determination
. We have not obtained a third-party determination that the Offer and Consent Solicitation are fair to holders of the Securities, including the unaffiliated holders thereof. The Company’s Board of Directors has determined that the Offer and Consent Solicitation are advisable and in the best interests of the Company and that the Offer and Consent Solicitation are fair to holders of the Securities, including the unaffiliated holders thereof, and has declared the Preferred Amendment advisable and is submitting the Preferred Amendment to the holders of the Class N Preferred Stock (and therefore the holders of the Securities) for consideration; however, neither the Company nor its Board of Directors, nor any other person, makes any recommendation to holders of Securities as to whether to tender or refrain from tendering their Securities or to provide or refrain from providing their consent to the Preferred Amendment in the Offer and Consent Solicitation. We have not retained, and do not intend to retain, any unaffiliated representative to act on behalf of holders of the Securities, including the unaffiliated holders of the Securities, for purposes of negotiating the Offer and Consent Solicitation or preparing a report concerning the fairness of the Offer and Consent Solicitation. You must make your own independent decision regarding your participation in the Offer and Consent Solicitation.
Withdrawal, extension or delay
. We may withdraw the Offer and Consent Solicitation under certain circumstances.
See
Section 7. Upon any such withdrawal, we are required by Rule 13e-4(f)(5) under the Exchange Act to promptly return the tendered Securities. We will announce our decision to withdraw the Offer and Consent Solicitation by disseminating notice by public announcement or otherwise as permitted by applicable law. Even if the Offer and Consent Solicitation is consummated, it may not be consummated on the schedule described hereunder. Accordingly, holders of our Securities participating in the Offer and Consent Solicitation may have to wait longer than expected to receive their cash, during which time such holder will not be able to effect transfers or sales of their Securities tendered in the Offer and Consent Solicitation.
Potential Effects on the Company
Reduced Cash Obligations.
A reduction in the number of outstanding shares of the Company’s preferred stock will reduce the amount of the Company’s future dividend obligations, as and when authorized by the Board of Directors and declared by the Company, thereby enhancing the Company’s operational flexibility by enabling the Company to use cash for other purposes.
Reduction in Liquidation Preference.
A reduction in the number of outstanding Securities will reduce the aggregate amounts payable to holders of Securities upon (i) any liquidation of the Company at the Liquidation Preference of $50.00 plus accrued and unpaid dividends, if any, per Security, or (ii) at the election of the Company to the extent permitted by the terms of the Charter and applicable law, voluntary repurchase by the Company of the Securities at a price agreed upon by the Company and the selling holder of Securities. The Securities are perpetual and there is no fixed date on which we are required to redeem or otherwise repurchase of the Class N Preferred Stock (and, consequently, the Securities). Additionally, no holder of Securities has the right to require the Company to redeem the Securities. If the Preferred Amendment and Deposit Agreement Amendment are effected, we will have the option to redeem all shares of Class N Preferred Stock (and, consequently, the Securities) that remain outstanding following the consummation of the Offer and Consent Solicitation during the 90 days following the date of effectiveness of the Preferred Amendment, at a redemption price for each share of Class N Preferred Stock equal to $60,340.00 (which would mean a redemption price for each Security equal to $60.34), plus accrued and unpaid dividends, if any, for the period from and including the last dividend payment date to, but not including, the redemption date).
No Change in Value.
The Company does not believe that the Offer and Consent Solicitation will result in a material change to its net book value, net earnings or going concern value.
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Potential Effects on the Market for the Securities
Consummation of the Offer and Implications for Trading Volume and Listing of the Securities.
The Securities are currently traded on the NYSE under the symbol “KIMprN.” The Securities acquired pursuant to the Offer will be retired and cancelled. Consequently, our purchase and subsequent cancellation of the Securities tendered in the Offer will reduce the number of the Securities that might otherwise be traded publicly and may reduce the number of holders of the Securities and the trading volume of the Securities on the NYSE. In addition, following completion of the Offer and Consent Solicitation, the Securities may no longer meet the NYSE’s continued listing criteria for preferred stock, in which case the Securities will be delisted from the NYSE and the Company will file a Form 25 to terminate registration of the Securities under Section 12(b) of the Exchange. If the Securities are delisted from the NYSE it will reduce the liquidity of the Securities.
Redemption of the Securities Following Effectiveness of the Preferred Amendment and Deposit Agreement Amendment.
Pursuant to the terms of the Offer and Consent Solicitation, if we obtain the Requisite Approvals for the Preferred Amendment and Deposit Agreement Amendment, we will have the option to redeem all the shares of Class N Preferred Stock (and, consequently, all of the Securities) that remain outstanding following the consummation of the Offer and Consent Solicitation during the 90 days following the date of effectiveness of the Preferred Amendment. In case we redeem the remaining Securities, which represent fractional interests in shares of Class N Preferred Stock, untendered in the Offer, the NYSE listing of the Securities will be terminated and we would seek to terminate the registration of the Securities pursuant to Section 12(b) of the Exchange Act. However, whether or not the Offer is consummated and any non-tendered Securities are redeemed in connection with the redemption of the shares of Class N Preferred Stock of which such Securities represent fractional interests, the Common Stock will remain listed on the NYSE registered with the SEC pursuant to Section 12(b) of the Exchange Act and we will remain an SEC registrant.
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Fairness of the Offer and Consent Solicitation.
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that the Offer Price represents a 2.39% premium as compared to the trailing 30-day volume weighted average price of the Securities on NYSE ending as of October 31, 2024;
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that the Offer Price represents a 24% premium as compared to the $50.00 per share liquidation preference of the Securities;
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the minimal trading volumes of the Securities;
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the current exchange ratio of 2.3071 shares of Common Stock for each Security, which, based on the closing price of our Common Stock on the NYSE on November 1, 2024 of $23.83 per share, results in a conversion value of $54.98 per Security;
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the year-to-date historical trading yields and prices of the Securities in comparison to certain selected market factors, such as the trading price of the Common Stock, volatility in the trading market for the Securities, yield spreads to the market rate for 30-year Treasury securities and the cost of borrowing;
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the implied yield for the Securities based on the Offer Price relative to preferred yields for the Depositary Shares representing one one-thousandth of a share of 5.125% Class L Cumulative Redeemable Preferred Stock and the Depositary Shares representing one one-thousandth of a share of 5.250% Class M Cumulative Redeemable Preferred Stock, as well as relative to preferred yields, adjusted for any differences in unsecured credit ratings from the Company, for selected public REITs that have certain characteristics in common with the Company, such as Federal Realty Investment Trust and Regency Centers Corporation, which like the Company are primarily focused on investments in shopping centers and have preferred stock outstanding;
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that the Offer and Consent Solicitation will provide cash consideration to, and immediate liquidity for, the holders of Securities, whose ability to sell their Securities is currently adversely affected by the minimal trading volume of the Securities on the NYSE; and
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that participation in the Offer and Consent Solicitation is a voluntary transaction in which each holder of Securities can determine individually whether to accept the Offer and Consent Solicitation.
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In approving the Offer and Consent Solicitation, based on analysis assembled and prepared by management, the Board of Directors weighed the costs and risks, including the costs associated with the Offer and Consent Solicitation, the risks of not completing the Offer and Consent Solicitation, and the potential adverse impact of the Offer and Consent Solicitation on the trading market for untendered Securities. The Board of Directors determined that the benefits of the Offer and Consent Solicitation outweighed these costs and risks based on the factors described above.
In determining the fairness of the Offer and Consent Solicitation to the holders of the Securities, including unaffiliated holders, the Board of Directors did not consider the fairness of the Offer and Consent Solicitation separately, as it views the Offer and Consent Solicitation as part of the same transaction. The price offered to holders of the Securities in the Offer is in return for both the tender of the holders’ Securities and their consent to the Preferred Amendment and Deposit Agreement Amendment. The foregoing is consistent with the purpose of the Offer and Consent Solicitation, which, as part of a single transaction, are intended to rationalize and optimize the Company’s capital structure following the Company’s acquisition of RPT.
The majority of directors who are not employees of the Company did not retain an unaffiliated representative to act solely on behalf of the unaffiliated holders of Securities for purposes of negotiating the terms of the Offer and Consent Solicitation (including any subsequent redemption of untendered Securities). Despite the lack of an unaffiliated representative acting solely on behalf of the unaffiliated holders of Securities, we believe that the Offer is procedurally fair and substantively fair to the unaffiliated holders of Securities. See factors listed under “–Approval from Holders of Securities” below.
Alternatives Considered
The Company considered several alternative methods of returning cash to holders of the Securities, in addition to the Offer and Consent Solicitation, including open market purchases and privately negotiated purchases. Pursuant to a previously established repurchase program authorized in January 2024 by the Board of Directors, the Company purchased a total of 80 Securities, representing 0.004% of the total outstanding Securities, through open market purchases at a weighted average price per share of $57.91 on August 19, 2024 and August 20, 2024. However, due to, among other factors, the relative illiquidity of the market and a desire to offer such returns proportionately to all holders of the Securities, additional open market purchases were not pursued. Privately negotiated purchases were also considered and rejected due to, among other factors, the fact that the widely dispersed nature of the holders of Securities would require a significant expenditure of time and effort to acquire any meaningful amount of Securities and a desire to offer such returns proportionately to all holders of the Securities. The return of cash through a tender offer was ultimately selected due to the fact that such an offer could be made to any and all holders of the Securities in an organized and orderly process that will allow holders sufficient time and information to make an informed decision.
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Premium Price
The Board of Directors, based on the recommendation of management, has approved an Offer Price that includes a premium to the market value of the Securities, as the Board of Directors believes the premium offer price will maximize participation in the Offer and is fair to the Company and the holders of the Securities. As discussed above, the premium was determined based upon a consideration of current and historical market prices.
No Third-Party Reports, Opinions or Presentations
We did not retain any independent representative or consultant to render a fairness opinion or to provide any fairness analysis in connection with the Offer and the Consent Solicitation as we did not think the expense of such an opinion or analysis was necessary. Additionally, we did not obtain any appraisals or valuations from an outside party in connection with the determination of the Offer consideration and therefore did not consider any in determining the fairness of the transaction. The Board of Directors determined that the Offer and Consent Solicitation are fair to the holders of the Securities, including the unaffiliated holders of the Securities, based on the Board of Directors’ and management’s own analysis, including having considered the factors described above. The Company did not receive any third-party reports, presentations, opinions, valuations or appraisals with respect to the Offer.
In addition, no outside party prepared a report or made a presentation to management or the Board of Directors that is materially related to the Offer or the Consent Solicitation, including with respect to the fairness of the Offer and Consent Solicitation offered to the holders of the Securities, including the unaffiliated holders of Securities.
The Board of Directors elected not to obtain a fairness opinion regarding the fairness of the Offer Price because each holder of Securities will have the ability, at such holder’s sole discretion, to determine whether to tender their Securities in the Offer. Additionally, we did not obtain any appraisals or valuations from an outside party in connection with the determination of the Offer consideration and therefore did not consider any in determining the fairness of the transaction. The Board of Directors determined that the Offer and Consent Solicitation are advisable and in the best interests of the Company, and that the Offer and Consent Solicitation are fair to the holders of the Securities, including the unaffiliated holders, based on the Board of Directors’ and management’s own analysis, including consideration of the factors described above. The Company did not receive any third-party reports, presentations, opinions, valuations, or appraisals with respect to the Offer.
After taking into account the factors set forth above, as well as others, the Offer and Consent Solicitation was unanimously approved by our Board of Directors, including all of our directors who are independent directors under NYSE listing and SEC audit committee standards, and all of the other directors who are not employees of the Company.
Weighing of Factors
The foregoing discussion of factors considered by the Board of Directors is not intended to be exhaustive, but summarizes the material factors considered by the Board of Directors. In view of the wide variety of factors considered in connection with its evaluation of the Offer and Consent Solicitation, the Board of Directors has found it impractical to, and therefore has not, quantified or otherwise attempted to assign relative weights to the specific factors considered in reaching a decision to approve the Offer and Consent Solicitation. Moreover, each member of the Board of Directors applied his or her own personal business judgment to the process and may have given different weight to different factors. The Board of Directors did not undertake to make any specific determination as to whether any factor, or any particular aspect of any factor, supported or did not support their ultimate determinations. The Board of Directors based its recommendations on the totality of the information presented.
Approval from Holders of Securities
The Offer and Consent Solicitation are conditioned upon receipt of the Requisite Preferred Shareholder Consents, among other conditions. As a result, because none of the holders of the Securities are affiliates of the Company, the Offer and the Consent Solicitation are effectively conditioned upon the approval of at least a majority of unaffiliated holders of the Securities. The conditions to the Offer and Consent Solicitation are for the sole benefit of the Company and may be asserted by the Company, regardless of the circumstances giving rise to any such condition (other than any actions or inactions of the Company). The Company reserves the right, in its sole discretion, to waive any and all conditions of the Offer and Consent Solicitation, including the receipt of the Requisite Preferred Shareholder Consents, prior to the Expiration Date.
See
Section 9. Should the Company elect to waive the receipt of the Requisite Preferred Shareholder Consents as a condition to the Offer, the Company may accept for purchase any
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Securities validly tendered (and not subsequently withdrawn) in the Offer on or prior to the Expiration Date without obtaining the approval of any unaffiliated holders of Securities. Should the Company elect to waive such condition, supplemental disclosure will be provided to holders of the Securities addressing implications for the Offer and Consent Solicitation, and the Offer will be extended by at least 5 business days. In such event, we continue to believe that the Offer would be procedurally fair and substantively fair to the unaffiliated holders of Securities. This belief is based on the unanimous approval of the Offer by all of our directors who are independent directors under NYSE listing and SEC audit committee standards, and all of the other directors who are not employees of the Company and on the following factors:
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all holders of Securities are offered the same consideration per Security;
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holders of Securities are offered a premium to the market price of the Securities;
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holders of Securities are provided with full disclosure of the terms and conditions of the Offer; and
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holders of Securities are afforded sufficient time to consider the Offer.
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All holders of Securities are being notified of the Offer and the implications of the Offer on their holdings, and all holders of Securities are afforded sufficient time to consider the Offer.
THE COMPANY’S BOARD OF DIRECTORS HAS DETERMINED THAT THE OFFER AND CONSENT SOLICITATION ARE ADVISABLE AND IN THE BEST INTERESTS OF THE COMPANY AND THAT THE OFFER AND CONSENT SOLICITATION ARE FAIR TO HOLDERS OF THE SECURITIES, INCLUDING THE UNAFFILIATED HOLDERS THEREOF, AND HAS DECLARED THE PREFERRED AMENDMENT ADVISABLE AND IS SUBMITTING THE PREFERRED AMENDMENT TO THE HOLDERS OF THE CLASS N PREFERRED STOCK (AND THEREFORE THE HOLDERS OF THE SECURITIES) FOR CONSIDERATION; HOWEVER, NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS, NOR ANY OTHER PERSON, MAKES ANY RECOMMENDATION TO HOLDERS OF SECURITIES AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING THEIR SECURITIES OR TO PROVIDE OR REFRAIN FROM PROVIDING THEIR CONSENT TO THE PREFERRED AMENDMENT IN THE OFFER AND CONSENT SOLICITATION. YOU SHOULD READ CAREFULLY THE INFORMATION IN THIS OFFER TO PURCHASE AND CONSENT SOLICITATION AND IN THE LETTER OF TRANSMITTAL AND CONSENT BEFORE MAKING YOUR DECISION WHETHER TO TENDER YOUR SECURITIES AND TO CONSENT TO THE PREFERRED AMENDMENT IN THE OFFER AND CONSENT SOLICITATION.
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Plans of the Company After the Offer and Consent Solicitation.
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any extraordinary transaction, such as a merger, reorganization or liquidation, involving us or any of our subsidiaries;
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any purchase, sale or transfer of an amount of our assets or any of our subsidiaries’ assets which is material to us and our subsidiaries, taken as a whole;
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any material change in our present dividend rate or policy, our indebtedness or capitalization;
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any material change in our present Board of Directors or management or any plans or proposals to change the number or the terms of directors (although we may fill vacancies arising on the Board of Directors) or to change any material term of the employment contract of any executive officer;
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any material change in our corporate structure or business;
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any class of our equity securities to be delisted from the NYSE;
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any class of our equity securities becoming eligible for termination of registration under section 12(g)(4) of the Exchange Act (except to the extent the results of the Offer and Consent Solicitation impact such eligibility with respect to the Securities);
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the termination or suspension of our obligation to file reports under Section 15(d) of the Exchange Act;
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the acquisition or disposition by any person of our securities; or
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any changes in our Charter, bylaws or other governing instruments or other actions that could impede the acquisition of control of us.
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We have considered and may make additional repurchases of Securities following the completion of the Offer and Consent Solicitation, should our Board of Directors determine that the Company has sufficient available cash to do so, and as such, the Company retains the right, from time to time, to continue to repurchase Securities. At such time, the Company may purchase additional Securities in the open market subject to market conditions, or in private transactions, exchange offers, tender offers or otherwise. Any of these purchases may be on the same terms as, or on terms more or less favorable to holders of Securities than, the terms of the Offer and Consent Solicitation. However, Rule 13e-4 under the Exchange Act generally prohibits us and our affiliates from purchasing the Securities, other than through the Offer and Consent Solicitation, until at least 10 business days after the expiration or termination of the Offer and Consent Solicitation. Any possible future purchases by us will depend on many factors, including the market price of the Securities, the results of the Offer and Consent Solicitation, our business and financial position and general economic and market conditions.
If the Preferred Amendment and Deposit Agreement Amendment are effected, we will have the option to redeem all shares of Class N Preferred Stock (and, consequently, Securities) that remain outstanding following the consummation of the Offer and Consent Solicitation during the 90 days following the date of effectiveness of the Preferred Amendment at a redemption price for each share of Class N Preferred Stock equal to $60,340.00 (which would mean a redemption price for each Security equal to $60.34), plus accrued and unpaid dividends, if any, for the period from and including the last dividend payment date to, but not including, the redemption date).
Following completion of the Offer and Consent Solicitation, the Securities may no longer meet the NYSE’s continued listing criteria for preferred stock, in which case the Securities will be delisted from the NYSE and the Company will file a Form 25 to terminate registration of the Securities under Section 12(b) of the Exchange Act. In the event that the closing of the Offer and Consent Solicitation results in the Company having fewer than 150 shares of Class N Preferred Stock (which corresponds to fewer than 150,000 Securities) outstanding, under the existing terms of the Class N Preferred Stock, the Company will have the right, at any time at its option, to cause all remaining outstanding shares of Class N Preferred Stock to be automatically converted into that number of whole shares of Common Stock equal to the greater of (i) the then prevailing conversion rate for the Class N Preferred Stock and (ii) the liquidation preference for the Class N Preferred Stock divided by the market value of the Common Stock, as contemplated by and subject to the existing terms of the Class N Preferred Stock.
Although we do not currently have any plans, other than as disclosed or incorporated by reference in this Offer to Purchase and Consent Solicitation that relate to or would result in any of the events discussed above, we continue to evaluate opportunities for increasing stockholder value, and we may undertake or plan actions that relate to or could result in one or more of these events. In furtherance thereof, our management periodically assesses possible acquisitions, divestitures and other extraordinary corporate transactions as well as indebtedness, capitalization, special dividends or changes in dividend policy and other matters.
Nothing in the Offer and Consent Solicitation will preclude us from considering any of the foregoing events or pursuing, developing or engaging in future plans, proposals or negotiations that relate to or would result in one or more of the foregoing events, subject to applicable law, and we reserve the right to do so. Although we may not have any current plans, other than as disclosed or incorporated by reference in this Offer to Purchase and Consent Solicitation, that relate to or would result in any of the events discussed above, we consider from time to time, and may undertake or plan actions that relate to or could result in, one or more of these events. Holders tendering Securities in the Offer and Consent Solicitation may run the risk of foregoing the benefit of any appreciation in the market price of the Securities resulting from such potential future events.
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General.
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Series of Securities
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CUSIP
No. / ISIN
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Liquidation
Preference Per
Security
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Offer
Price
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Depositary Shares representing 1/1,000 of a Share of 7.25% Class N Cumulative Convertible Perpetual Preferred Stock
(NYSE: KIMprN)
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49446R 687/
US49446R6870
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$50.00
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$62.00 per Security, plus accrued and unpaid dividends, if any, through the day before the Settlement Date
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We have declared a quarterly dividend on the Class N Preferred Stock to be paid on the Dividend Payment Date to shareholders of record on the Dividend Record Date. Holders of Securities who validly tender their Securities (and whose Securities are accepted for purchase by the Company) in the Offer will receive accrued and unpaid dividends, if any, for the period from and including the last dividend payment date, to, but not including, the Settlement Date, unless the Settlement Date occurs on or following the Dividend Record Date and prior to the Dividend Payment Date (in which case accrued and unpaid dividends related to the Declared Dividend will not be paid to tendering holders on the Settlement Date and the Declared Dividend will be paid to holders of record on the Dividend Record Date). At the time you tender your Securities, you will not know the extent of participation by other holders of Securities in the Offer and Consent Solicitation.
The Consent Solicitation
. Concurrently with the Offer, we also are soliciting (i) the Requisite Preferred Shareholder Consents to approve the Preferred Amendment to permit the Company to have the option to redeem the Class N Preferred Stock during the 90 days following the date of effectiveness of the Preferred Amendment at a redemption price for each share of Class N Preferred Stock equal to $60,340.00 (which would mean a redemption price for each Security equal to $60.34), plus accrued and unpaid dividends, if any, for the period from and including the last dividend payment date to, but not including, the redemption date)) and (ii) the Requisite Deposit Agreement Amendment Approval. In addition to the Requisite Preferred Shareholder Consents, the Requisite Common Stockholder Approval is required to approve the Preferred Amendment in order to effect the Preferred Amendment. The redemption price was determined by taking the Offer Price for each Security of $62.00 and deducting dividends expected to accrue from the Settlement Date through, but not including, the anticipated date of redemption. We plan to solicit the Requisite Common Stockholder Approval from the holders of our Common Stock in support of the Preferred Amendment at the Company’s 2025 Annual Meeting but may do so prior or subsequent to such meeting and may do so more than once during the 12-month effectiveness of the Requisite Preferred Shareholder Consents. The Offer and Consent Solicitation do not constitute a solicitation of consents from holders of our Common Stock to the Preferred Amendment. The solicitation of consents from holders of our Common Stock to the Preferred Amendment is expected to be made pursuant to the 2025 Proxy Statement.
If the Requisite Approvals are obtained and the Preferred Amendment and Deposit Agreement Amendment are effected, we will have the option to redeem all shares of Class N Preferred Stock (and, consequently, Securities) that remain outstanding following the consummation of the Offer and Consent Solicitation during the 90 days following the date of effectiveness of the Preferred Amendment at the redemption price referred to in the prior paragraph. At such time, the Company’s Board of Directors intends to consider redeeming all shares of Class N Preferred Stock (and, consequently, Securities) that remain outstanding, subject to determining whether a redemption is advisable and in the best interests of the Company. The decision whether or not to redeem shares of Class N Preferred Stock (and, consequently, Securities) that remain outstanding at such time will be based on the price and volume of any recent secondary market sales of the Securities, prevailing interest rates at the time, Company and Company cash on hand, among other factors. As of the date of this Offer to Purchase and Consent Solicitation, the Company has sufficient cash on hand to purchase the maximum number of Securities sought in the Offer, and there are no legal or contractual restrictions on cash distributions from subsidiaries that would limit the purchase of the Securities in the Offer. A copy
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Procedures for Tendering the Securities.
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Transmittal and Consent. A tender will be deemed to have been received only when the Tender Agent receives (i) either a duly completed agent’s message through the facilities of DTC at the Tender Agent’s DTC account or a properly completed Letter of Transmittal and Consent, and (ii) confirmation of book-entry transfer of the Securities into the Tender Agent’s applicable DTC account.
If a broker, dealer, commercial bank, trust company or other nominee holds your Securities, it is likely that it has an earlier deadline for you to act to instruct it to accept the Offer and provide your consent to the Preferred Amendment on your behalf. We recommend that you contact your broker, dealer, commercial bank, trust company or other nominee to determine its applicable deadline.
We recommend that investors who hold Securities through brokers, dealers, commercial banks, trust companies or other nominees consult the brokers, dealers, commercial banks, trust companies or other nominees to determine whether transaction costs are applicable if they tender Securities through the brokers, dealers, commercial banks, trust companies or other nominees and not directly to the Tender Agent.
The Securities may be tendered and accepted only in whole shares. No alternative, conditional or contingent tenders will be accepted.
Signature Guarantees
. Except as otherwise provided below, all signatures on a Letter of Transmittal and Consent must be guaranteed by a financial institution (including most banks, savings and loans associations and brokerage houses) which is a participant in the Securities Transfer Agents Medallion Program. Signatures on a Letter of Transmittal and Consent need not be guaranteed if:
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the Letter of Transmittal and Consent is signed by the registered holder (which term, for purposes of this Section 6, shall include any participant in DTC whose name appears on a security position listing as the owner of the Securities) of the Securities tendered therewith and the holder has not completed either of the boxes under “Special Payment and Delivery Instructions” within the Letter of Transmittal and Consent; or
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the Securities are tendered for the account of a bank, broker, dealer, credit union, savings association or other entity which is a member in good standing of the Securities Transfer Agents Medallion Program or a bank, broker, dealer, credit union, savings association or other entity which is an “eligible guarantor institution,” as such term is defined in Rule 17Ad-15 under the Exchange Act.
See
Instruction 1 of the Letter of Transmittal and Consent.
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There are no guaranteed delivery procedures available with respect to the Offer and Consent Solicitation under the terms of this Offer to Purchase and Consent Solicitation or any related materials. Holders must tender their Securities and consent to the Preferred Amendment in accordance with the procedures set forth in this section.
The Company will make payment for Securities tendered and accepted for purchase in the Offer and Consent Solicitation only after the Tender Agent receives a timely confirmation of the book-entry transfer of the Securities into the Tender Agent’s applicable account at DTC, a properly completed and a duly executed Letter of Transmittal and Consent, or an agent’s message, and any other documents required by the Letter of Transmittal and Consent.
Book-Entry Delivery
. Any financial institution that is a DTC participant may make book-entry delivery of the Securities by causing DTC to transfer Securities into the Tender Agent’s applicable account in accordance with DTC’s procedures for transfer. Although DTC participants may effect delivery of Securities into the Tender Agent’s applicable account at DTC, such deposit must be accompanied by either:
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a message that has been transmitted to the Tender Agent through the facilities of DTC, or
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a properly completed and duly executed Letter of Transmittal and Consent, including any other required documents, that has been transmitted to and received by the Tender Agent at its address as set forth on the back page of this Offer to Purchase and Consent Solicitation before the Expiration Date.
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Method of Delivery
. The method of delivery of the Letter of Transmittal and Consent and any other required documents is at the election and risk of the tendering holder of Securities. If you choose to deliver required documents by mail, we recommend that you use registered mail with return receipt requested, properly insured. Delivery of the Letter of Transmittal and Consent and any other required documents to DTC does not constitute delivery to the Tender Agent.
Appraisal Rights
. You will have no appraisal rights in connection with the Offer and Consent Solicitation.
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U.S. Federal Backup Withholding
. Under the U.S. federal income tax backup withholding rules, 24% of the gross proceeds payable to a holder of the Securities or other payee pursuant to the Offer and Consent Solicitation will be withheld and remitted to the U.S. Treasury, unless the holder of the Securities or other payee provides his or her taxpayer identification number (
i.e.
, employer identification number or Social Security number) to the Tender Agent and certifies under penalties of perjury that such number is correct and that such holder of the Securities or other payee is exempt from backup withholding, or such holder of the Securities or other payee otherwise establishes an exemption from backup withholding. If the Tender Agent is not provided with the correct taxpayer identification number, the holder of the Securities or other payee may also be subject to certain penalties imposed by the Internal Revenue Service (the “
IRS
”). Therefore, each tendering U.S. Holder (as defined below in Section 15) should complete and sign the IRS Form W-9 included as part of the Letter of Transmittal and Consent so as to provide the information and certification necessary to avoid backup withholding unless the U.S. Holder otherwise establishes to the satisfaction of the Tender Agent that such tendering U.S. Holder is not subject to backup withholding. Certain holders of the Securities (including, among others, C corporations) are not subject to these backup withholding and reporting requirements. Exempt U.S. Holders should indicate their exempt status on the IRS Form W-9 included as part of the Letter of Transmittal and Consent. In order for a Non-U.S. Holder (as defined below in Section 15) to qualify as an exempt recipient, such holder of the Securities generally must submit an IRS Form W-8BEN, IRS Form W-8BEN-E or other applicable IRS Form W-8, signed under penalties of perjury, attesting to that Non-U.S. Holder’s non-U.S. status. Tendering holders of the Securities can obtain other applicable forms from the Tender Agent or from www.irs.gov.
See
Instruction 8 of the Letter of Transmittal and Consent.
Backup withholding is not an additional tax, and any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against a holder’s U.S. federal income tax liability provided the required information is timely furnished to the IRS.
TO PREVENT U.S. FEDERAL BACKUP WITHHOLDING ON THE GROSS PAYMENTS MADE TO YOU FOR THE SECURITIES PURCHASED PURSUANT TO THE OFFER AND CONSENT SOLICITATION, YOU MUST PROVIDE THE TENDER AGENT WITH A COMPLETED IRS FORM W-9 OR APPLICABLE IRS FORM W-8, AS APPROPRIATE, OR OTHERWISE ESTABLISH AN EXEMPTION FROM SUCH WITHHOLDING.
Where Securities are tendered on behalf of the holder of Securities by a broker or other DTC participant, the foregoing IRS Forms and certifications generally must be provided by the holder of Securities to the DTC participant, instead of the Tender Agent, in accordance with the DTC participant’s applicable procedures.
For a discussion of certain U.S. federal income tax consequences to tendering holders of the Securities,
see
Section 15.
Return of Withdrawn Securities
. In the event of proper withdrawal of tendered Securities, the Tender Agent will credit the Securities to the appropriate account maintained by the tendering holder of Securities at DTC without expense to the holder of the Securities.
Determination of Validity; Rejection of Securities; Waiver of Defects; No Obligation to Give Notice of Defects
. The Company will determine, in its sole discretion, all questions as to the validity, form, eligibility (including time of receipt) and acceptance for purchase of any tender of Securities, and its determination will be final and binding on all parties. The Company reserves the absolute right to reject any or all tenders of the Securities that it determines are not in proper form or the acceptance for purchase of or payment for which the Company determines may be unlawful. The Company also reserves the absolute right to waive any defect or irregularity in any tender with respect to the Securities or any particular holder of Securities, and the Company’s interpretation of the terms of the Offer and Consent Solicitation will be final and binding on all parties. No tender of Securities will be deemed to have been properly made until the holder of the Securities cures, or the Company waives, all defects or irregularities. None of the Company, the Tender Agent, the Information Agent, the Dealer Manager and Solicitation Agent or any other person will be under any duty to give notification of any defects or irregularities in any tender or incur any liability for failure to give this notification.
Tendering Holder’s Representation and Warranty; The Company’s Acceptance Constitutes an Agreement
. A tender of Securities under the procedures described above will constitute the tendering holder’s acceptance of the terms and conditions of the Offer and Consent Solicitation, as well as the tendering holder’s representation and warranty to the
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Company that (i) such holder of Securities has the full power and authority to tender, sell, assign and transfer the tendered Securities and (ii) when the same are accepted for purchase by the Company, it will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, changes and encumbrances and not subject to any adverse claims.
The Company’s acceptance for purchase of Securities tendered and the provided consent to the Preferred Amendment under the Offer and Consent Solicitation will constitute a binding agreement between the tendering holder of Securities and the Company upon the terms and conditions of the Offer and Consent Solicitation.
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Withdrawal Rights.
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Purchase of Securities and Payment of Purchase Price.
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payment of the purchase price is to be made to any person other than the registered holder, or
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tendered Securities are registered in the name of any person other than the person signing the Letter of Transmittal and Consent,
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then the amount of all stock transfer taxes, if any (whether imposed on the registered holder or the other person), payable on account of the transfer to the person will be deducted from the purchase price unless satisfactory evidence of the payment of the stock transfer taxes, or exemption therefrom, is submitted. See Instruction 7 of the Letter of Transmittal and Consent.
If the Offer and Consent Solicitation expires or terminates and the Securities have not been accepted for purchase by us following the expiration or termination of the Offer and Consent Solicitation, the holder of Securities that were not accepted for purchase will continue to own those Securities. The Tender Agent will credit those Securities to the appropriate account maintained by the tendering holder of Securities at DTC without expense to the holder of the Securities.
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Conditions of the Offer and Consent Solicitation.
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•
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there shall have been threatened, instituted or pending any action or proceeding by any government or governmental, regulatory or administrative agency or instrumentality, authority or tribunal or any other person, domestic or foreign, before any court, authority, agency or tribunal that directly or indirectly challenges the making of the Offer and Consent Solicitation, the acquisition of some or all of the Securities under the Offer and Consent Solicitation or otherwise relates in any manner to the Offer and Consent Solicitation, or is, or is reasonably likely to be, in our reasonable judgment, materially adverse to our business, operations, properties, condition, assets, liabilities or prospects, or which would or might, in our reasonable judgment, prohibit, prevent, restrict or delay consummation of the Offer and Consent Solicitation or materially impair the contemplated benefits to the Company of the Offer and Consent Solicitation;
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there shall have been any action threatened, instituted, pending or taken, or approval withheld, or any statute, rule, regulation, judgment, order or injunction threatened, proposed, sought, promulgated, enacted, entered, amended, enforced or deemed to be applicable to the Offer and Consent Solicitation or the Company or any of its subsidiaries, by any court or any authority, agency, tribunal or other body that, in the Company’s reasonable judgment, would or might, directly or indirectly:
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make the acceptance for purchase of, or payment for, some or all of the Securities illegal or otherwise restrict or prohibit completion of the Offer and Consent Solicitation; or
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○
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delay or restrict the ability of the Company, or render the Company unable, to accept for purchase or pay for some or all of the Securities; or
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•
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in the Company’s reasonable judgment, there has occurred any of the following:
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any general suspension of trading in, or the imposition of any general curb on trading of securities on any U.S. national securities exchange or in the over-the-counter market;
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any decrease of more than 10% in the market price for any of the Company’s securities on the NYSE or in the general level of market prices for equity securities in the Dow Jones Industrial Average, New York Stock Exchange Index, NASDAQ Composite Index or the Standard Poor’s 500 Composite Index measured from the close of trading on November 4, 2024 shall have occurred;
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the payment of the funds in the Tender Offer would be prohibited by law;
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the declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, whether or not mandatory;
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the commencement of any war, armed hostilities or other international calamity, including any act of terrorism, on or after the date of this Offer to Purchase and Consent Solicitation, in or involving the
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25
United States, or the material escalation of any such armed hostilities which had commenced before the date of this Offer to Purchase and Consent Solicitation, in each case which is reasonably likely to have a material adverse effect on the Company or on the Company’s ability to complete the Offer and Consent Solicitation;
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any limitation, whether or not mandatory, imposed by any governmental, regulatory, self-regulatory or administrative authority, tribunal or other body, or any other event, that could materially affect the extension of credit by banks or other lending institutions in the United States;
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any change in tax law that would materially change the tax consequences of the Offer and Consent Solicitation in a manner that would reasonably be expected to have a material and adverse effect on the Company; or
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any change or changes have occurred or likely to occur affecting the Company or any of its subsidiaries’ business or financial affairs that, in our reasonable judgment, (i) is, or is reasonably likely to be, materially adverse to the Company and its subsidiaries’ business, condition (financial or otherwise), income, assets, liabilities, operations, property or prospects, (ii) would or might prohibit, prevent, restrict or delay consummation of the Offer and Consent Solicitation, or (iii) would materially impair the contemplated benefits of the Offer and Consent Solicitation to the Company or be material to holders of Securities in deciding whether to accept the Offer and consent to the Preferred Amendment.
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Additionally, the Offer and Consent Solicitation are conditioned upon receipt of the Requisite Preferred Shareholder Consents, which effectively requires tenders from holders of at least two-thirds of the outstanding shares of Class N Preferred Stock (which corresponds to tenders from holders of two-thirds of the outstanding Securities). In addition, as to any holders of the Securities, the Offer and Consent Solicitation is conditioned upon such holder of the Securities desiring to tender Securities in the Offer delivering to the Transfer Agent in a timely manner the holder’s Securities to be tendered and any other required paperwork, all in accordance with the applicable procedures described in this Offer to Purchase and Consent Solicitation and set forth in the Letter of Transmittal and Consent.
In addition, if completing the Offer and Consent Solicitation on their current or amended terms, or at all, may cause the Company to fail to qualify for taxation as a real estate investment trust (“
REIT
”) for U.S. federal income tax purposes, the Company may terminate or amend the Offer and Consent Solicitation or postpone the acceptance of the Securities for payment.
The foregoing conditions are for the sole benefit of the Company and may be waived by the Company, in whole or in part, at any time and from time to time, before the Expiration Date, in its reasonable discretion. The Company’s failure at any time to exercise any of the foregoing rights shall not be deemed a waiver of any of these rights, and each of these rights shall be deemed an ongoing right that may be asserted at any time and from time to time. Notwithstanding the foregoing, in the event that one or more events described above occurs before the Expiration Date, the Company will promptly notify the holders of Securities of the Company’s determination as to whether to (i) waive or modify, in whole or in part, the condition and continue the Offer and Consent Solicitation or (ii) terminate the Offer and Consent Solicitation. Any determination or judgment by the Company concerning the events described above will be final and binding on all parties, subject to a stockholder’s right to challenge our determination in a court of competent jurisdiction.
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Historical Price Range of the Securities.
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26
The following table sets forth for the periods indicated, the high and low reported closing prices per Security on the NYSE and the cash dividends per Security. Prior to January 2, 2024 (the date of the RPT Merger) the RPT Preferred Shares were traded on the NYSE under the ticker symbol RPT.PRD.
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Securities
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Cash Distributions
per Security
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High
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Low
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Fiscal Year Ending December 31, 2024
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Fourth Quarter (through November 1, 2024)
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$61.38
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$59.33
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$0.90625
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Third Quarter
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$61.86
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$53.85
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$0.90625
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Second Quarter
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$56.44
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$53.29
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$0.90625
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First Quarter (beginning January 2, 2024)
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$58.00
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$55.87
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$0.14097
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27
Pursuant to a previously established repurchase program authorized in January 2024 by the Board of Directors, we purchased a total of 80 Securities, representing 0.004% of the total outstanding Securities, through open market purchases at a weighted average price per share of $57.91 on August 19, 2024 and August 20, 2024.
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Source and Amount of Funds.
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Covenant
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Must Be
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As of
September 30, 2024
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Total Indebtedness to Gross Asset Value (“GAV”)
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60%
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35%
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Total Priority Indebtedness to GAV
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35%
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1%
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Unencumbered Asset Net Operating Income to Total Unsecured Interest Expense
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1.75x
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4.5x
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Fixed Charge Total Adjusted EBITDA to Total Debt Service
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1.50x
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4.0x
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Certain Information Concerning the Company.
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28
the Company had 67 other property interests, primarily including net leased properties, preferred equity investments, and other investments, totaling 5.5 million square feet of GLA. The Company’s ownership interests in real estate consist of its consolidated portfolio and portfolios where the Company owns an economic interest, such as properties in the Company’s investment real estate management programs, where the Company partners with institutional investors and also retains management.
The Company’s primary business objective is to be the premier owner and operator of open-air, grocery-anchored shopping centers, and a growing portfolio of mixed-use assets, in the U.S. The Company believes it can achieve this objective by:
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•
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increasing the value of our existing portfolio of properties and generating higher levels of portfolio growth;
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•
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increasing cash flows for reinvestment and/or for distribution to stockholders while maintaining conservative payout ratios;
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maintaining strong debt metrics and our A-/BBB+/Baa1 unsecured debt ratings;
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•
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continuing growth in desirable demographic areas with successful retailers, primarily focused on grocery anchors; and
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•
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increasing the number of entitlements for residential use.
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On September 9, 2024, Fitch Ratings assigned the Company a rating of A- for its senior unsecured debt, assigned a BBB credit rating for its preferred stock, and assigned its ‘Stable’ rating outlook. As a result, the Company achieved certain interest rate reductions and facility fee reduction for its Revolving Credit Facility and unsecured term loans.
The Company is a Maryland corporation organized to qualify as a REIT under the Internal Revenue Code of 1986, as amended (the “
Code
”). We generally conduct substantially all of our operations through Kimco Realty OP, LLC, a Delaware limited liability company (“
Kimco OP
”) (either directly or indirectly through its subsidiaries). This structure is commonly referred to as an umbrella partnership real estate investment trust (an “
UPREIT
”).
Our executive offices are located at 500 North Broadway, Suite 201, Jericho, New York 11753, and our telephone number is (516) 869-9000.
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Interests of Directors and Executive Officers; Transactions and Arrangements Concerning the
Securities and the Common Stock.
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29
Arrangements Concerning the Common Stock
In May 2020, the Company’s stockholders approved the 2020 Equity Participation Plan (the “
2020 Plan
”), which is a successor to the Restated Kimco Realty Corporation 2010 Equity Participation Plan that expired in March 2020. The 2020 Plan provides for a maximum of 10.0 million shares of Common Stock to be reserved for the issuance of stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, dividend equivalents, long term incentive plan units, stock payments and deferred stock awards to eligible employees, consultants, and directors. At June 30, 2024, the Company had 3.0 million shares of Common Stock available for issuance under the 2020 Plan.
The Company accounts for equity awards in accordance with FASB’s Compensation – Stock Compensation guidance which requires that all share-based payments to employees, including grants of employee stock options, restricted stock and performance shares, be recognized in the Consolidated Statements of Income over the service period based on their fair values. Fair value of performance awards is determined using the Monte Carlo method, which is intended to estimate the fair value of the awards at the grant date. Fair value of restricted shares is based on the price on the date of grant.
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Legal Matters; Regulatory Approvals.
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Certain U.S. Federal Income Tax Consequences of the Offer.
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•
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U.S. expatriates and former citizens or long-term residents of the United States;
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•
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U.S. Holders whose functional currency is not the U.S. dollar;
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•
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persons holding our Securities as part of a hedge, straddle, or other risk reduction strategy or as part of a conversion transaction or other integrated investment;
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•
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banks, insurance companies, and other financial institutions;
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30
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•
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REITs or regulated investment companies;
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•
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brokers, dealers, or traders in securities;
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•
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“controlled foreign corporations,” “passive foreign investment companies,” and corporations that accumulate earnings to avoid U.S. federal income tax;
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•
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S corporations, partnerships or other entities or arrangements treated as partnerships for U.S. federal income tax purposes (and investors therein);
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•
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tax-exempt organizations or governmental organizations;
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persons subject to special tax accounting rules as a result of any item of gross income with respect to our Securities being taken into account in an applicable financial statement;
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•
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persons deemed to sell our Securities under the constructive sale provisions of the Code;
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•
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persons who hold or receive our Securities pursuant to the exercise of any employee stock option or otherwise as compensation; and
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•
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tax-qualified retirement plans.
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If an entity or arrangement treated as a partnership for U.S. federal income tax purposes holds our Securities, the tax treatment of a partner in the partnership will depend on the status of the partner, the activities of the partnership, and certain determinations made at the partner level. Accordingly, partnerships holding our Securities and the partners in such partnerships should consult their tax advisors regarding the U.S. federal income tax consequences to them.
THIS DISCUSSION IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT TAX ADVICE. INVESTORS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES OF THE TENDER OF SECURITIES PURSUANT TO THE OFFER ARISING UNDER THE U.S. FEDERAL ESTATE OR GIFT TAX LAWS OR UNDER THE LAWS OF ANY STATE, LOCAL, OR NON-U.S. TAXING JURISDICTION OR UNDER ANY APPLICABLE INCOME TAX TREATY.
For purposes of this discussion, a “
U.S. Holder
” is a beneficial owner of Securities that, for U.S. federal income tax purposes, is or is treated as:
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•
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an individual who is a citizen or resident of the United States;
|
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•
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a corporation created or organized in or under the laws of the United States, any state thereof or the District of Columbia;
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•
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an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or
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•
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a trust if it (1) is subject to the primary supervision of a U.S. court and the control of one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code), or (2) has a valid election in effect under applicable Treasury regulations to be treated as a United States person for U.S. federal income tax purposes.
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For purposes of this discussion, a “
Non-U.S. Holder
” is a beneficial owner of Securities that is neither a U.S. Holder nor an entity or arrangement treated as a partnership for U.S. federal income tax purposes.
Holders that do not intend to tender their Securities are strongly advised to consult their own tax advisors regarding the consequences to them of the Offer.
U.S. Holders
Tender of Securities Pursuant to the Offer
The tender of Securities pursuant to the Offer generally will be treated under Section 302 of the Code as a distribution that is taxable as a dividend (as described below) unless it satisfies the requirements of Section 302(b) of the Code. Pursuant to Section 302(b) of the Code, the tender generally should be treated as a sale of the U.S. Holder’s Securities, with the tax consequences described below under “—U.S. Holders—Sale or Exchange Treatment” if it (i) is “substantially disproportionate” with respect to the holder’s interest in the Company’s stock,
31
(ii) results in a “complete termination” of the holder’s interest in all of the Company’s classes of stock, or (iii) is “not essentially equivalent to a dividend” with respect to the holder, all within the meaning of Section 302(b) of the Code (the “
Section 302 Tests
”).
The tender of Securities held by a U.S. Holder will be “substantially disproportionate” with respect to such U.S. Holder if (A) the percentage of the Company’s voting stock actually and constructively owned by the U.S. Holder immediately following the tender is less than 80% of the percentage of the Company’s voting stock actually and constructively owned by the U.S. Holder immediately before the tender and (B) immediately after the tender, the U.S. Holder owns less than 50% of the total combined voting power of all of the Company’s voting stock.
The tender of Securities held by a U.S. Holder will be a “complete termination” of the U.S. Holder’s equity interest in the Company if either (i) the U.S. Holder owns none of the Company’s capital stock either actually or constructively immediately after the tender of the U.S. Holder’s Securities or (ii) the U.S. Holder actually owns none of the Company’s capital stock immediately after the tender of the Securities and, with respect to shares of capital stock constructively owned by the U.S. Holder immediately after the tender, the U.S. Holder is eligible to waive, and effectively waives, constructive ownership of all such shares under procedures described in Section 302(c) of the Code. U.S. Holders wishing to satisfy the “complete termination” test through waiver of attribution are advised to consult their tax advisors regarding the requirements, mechanics and desirability of such a waiver.
Even if the tender of the Securities fails to satisfy the “complete termination” test and the “substantially disproportionate” test, a U.S. Holder may nevertheless satisfy the “not essentially equivalent to a dividend” test if the sale results in a “meaningful reduction” in the U.S. Holder’s equity interest in the Company. Whether the receipt of cash by a U.S. Holder will be “not essentially equivalent to a dividend” will depend upon the U.S. Holder’s particular facts and circumstances; however, a sale that results in any reduction of the proportionate equity interest in the Company held by a U.S. Holder with a relative equity interest that is minimal and who does not exercise any control over or participate in the Company’s management may be treated as “not essentially equivalent to a dividend.”
Special “constructive ownership” rules apply in determining whether any of the Section 302 Tests has been satisfied. A U.S. Holder must take into account not only the shares of Company capital stock that are actually owned by the U.S. Holder, but also shares that are constructively owned by the U.S. Holder within the meaning of Section 318 of the Code. Very generally, a U.S. Holder may be treated as constructively owning shares actually owned, and in some cases constructively owned, by certain members of the U.S. Holder’s family and certain entities (such as corporations, partnerships, trusts and estates) in which the U.S. Holder actually or constructively has an equity interest or which have an equity interest in the U.S. Holder, as well as shares the U.S. Holder has an option to purchase. U.S. Holders are strongly advised to consult their tax advisors regarding the application of the rules in Sections 302 and 318 of the Code to their particular circumstances.
If a sale of Securities held by a U.S. Holder does not meet any of the Section 302 Tests, the sale proceeds will be treated as a distribution, with the tax consequences described under “—U.S. Holders—Distribution Treatment” below. In such a case, a U.S. Holder’s remaining adjusted tax basis in the redeemed Securities will be transferred to such holder’s retained shares of Company capital stock. If a tendering U.S. Holder does not actually retain any stock, the basis of any tendered Securities may (depending on circumstances) be added to stock retained by a person related to such U.S. Holder or the basis may be lost.
Sale or Exchange Treatment
If the tender of Securities pursuant to the Offer is treated as a sale or exchange by the U.S. Holder pursuant to the rules discussed above, the U.S. Holder generally will recognize capital gain or loss equal to the difference between the amount of cash received pursuant to the Offer (including cash received that is attributable to accrued but undeclared dividends, but excluding cash attributable to declared but unpaid dividends, which would be taxable in the manner described below under “—U.S. Holders—Distribution Treatment”) and the adjusted tax basis in the Securities sold or disposed of. Generally, a U.S. Holder’s tax basis for the tendered Securities will be equal to the cost of the Securities to the U.S. Holder, less any prior distributions treated as a return of capital. Any such capital gain or loss will be long-term capital gain or loss if the holder’s holding period for the Securities is more than one year at the time of disposition. Long-term capital gain recognized by non-corporate U.S. Holders (including individuals) generally is subject to a reduced rate of U.S. federal income tax. The deductibility of capital losses is subject to certain limitations. Gain or loss must be determined separately for each block of tendered Securities (i.e., Securities acquired by the U.S. Holder at the same cost in a single transaction).
32
Distribution Treatment
Distributions Generally
. Payments that a U.S. Holder of Securities receives pursuant to the Offer that are treated as distributions pursuant to the rules discussed above will be treated as follows: first, distributions out of the Company’s current or accumulated earnings and profits will be treated as dividends and, other than with respect to capital gain dividends (discussed below) and certain amounts which have previously been subject to corporate level tax, will be taxable to U.S. Holders as ordinary income when actually or constructively received.
See
“—Tax Rates” below. As long as the Company qualifies as a REIT, these distributions will not be eligible for the dividends-received deduction in the case of U.S. Holders that are corporations or, except to the extent described in “—Tax Rates” below, the preferential rates on qualified dividend income applicable to non-corporate U.S. Holders, including individuals. For purposes of determining whether distributions to holders of the Company’s capital stock are out of its current or accumulated earnings and profits, the Company’s earnings and profits will be allocated first to its outstanding preferred stock and then to its outstanding Common Stock.
Amounts treated as distributions in excess of the Company’s current and accumulated earnings and profits allocable to its capital stock will be treated first as a tax-free return of capital to a U.S. Holder to the extent of the U.S. Holder’s adjusted tax basis in such shares of stock. This treatment will reduce the U.S. Holder’s adjusted tax basis in such shares of stock by such amount, but not below zero. Distributions in excess of the Company’s current and accumulated earnings and profits and in excess of a U.S. Holder’s adjusted tax basis in its shares will be taxable as capital gain. Such gain will be taxable as long-term capital gain if the shares have been held for more than one year.
Capital Gain Dividends
. Dividends that the Company properly designates as capital gain dividends will generally be taxable to taxable U.S. Holders as a gain from the sale or disposition of a capital asset held for more than one year, to the extent that such gain does not exceed the Company’s actual net capital gain for the taxable year, and may not exceed its dividends paid for the taxable year, including dividends paid in the following year that are treated as paid in the current year. U.S. Holders that are corporations may, however, be required to treat up to 20% of certain capital gain dividends as ordinary income. If the Company properly designates any portion of a dividend as a capital gain dividend, then, except as otherwise required by law, the Company presently intends to allocate a portion of the total capital gain dividends paid or made available to holders of all classes of its capital stock for the year to the holders of each class of its capital stock in proportion to the amount that its total dividends, as determined for U.S. federal income tax purposes, paid or made available to the holders of each such class of its capital stock for the year bears to the total dividends, as determined for U.S. federal income tax purposes, paid or made available to holders of all classes of its capital stock for the year. In addition, except as otherwise required by law, the Company may make a similar allocation with respect to any undistributed long-term capital gains which are to be included in its stockholders’ long-term capital gains, based on the allocation of the capital gain amount which would have resulted if those undistributed long-term capital gains had been distributed as “capital gain dividends” by the Company to its stockholders.
Passive Activity Losses and Investment Interest Limitations
Distributions the Company makes and gain arising from the sale or exchange of its Securities by a U.S. Holder will not be treated as passive activity income. As a result, U.S. Holders generally will not be able to apply any “passive activity losses” against this income or gain. A U.S. Holder generally may elect to treat capital gain dividends, capital gains from the disposition of Securities and income designated as qualified dividend income as investment income for purposes of computing the investment interest limitation, but in such case, the holder will be taxed at ordinary income rates on such amount. Other distributions made by the Company, to the extent they do not constitute a return of capital, generally will be treated as investment income for purposes of computing the investment interest limitation.
Tax Rates
The maximum tax rate for non-corporate taxpayers for (1) long-term capital gains, including certain “capital gain dividends,” generally is 20% (although depending on the characteristics of the assets which produced these gains and on designations which the Company may make, certain capital gain dividends may be taxed at a 25% rate) and (2) “qualified dividend income” generally is 20%. In general, dividends payable by REITs are not eligible for the reduced tax rate on qualified dividend income, except to the extent that certain holding period requirements have been met and the REIT’s dividends are attributable to dividends received from taxable corporations (such as its taxable REIT subsidiaries) or to income that was subject to tax at the corporate/REIT level (for example, if the REIT
33
distributed taxable income that it retained and paid tax on in the prior taxable year). Capital gain dividends will only be eligible for the rates described above to the extent that they are properly designated by the REIT as “capital gain dividends.” U.S. Holders that are corporations may be required to treat up to 20% of some capital gain dividends as ordinary income. In addition, non-corporate U.S. holders, including individuals, generally may deduct up to 20% of dividends from a REIT, other than capital gain dividends and dividends treated as qualified dividend income, for taxable years beginning before January 1, 2026 for purposes of determining their U.S. federal income tax (but not for purposes of the 3.8% Medicare tax), subject to certain holding period requirements and other limitations.
Backup Withholding
See
“U.S. Federal Backup Withholding” in Section 6 for a discussion on the application of U.S. federal backup withholding to payments made pursuant to the Offer.
Non-U.S. Holders
Tender of Securities Pursuant to the Offer
If the tender of Securities pursuant to the Offer satisfies one of the Section 302 Tests (as described above under “—U.S. Holders—Tender of Securities Pursuant to the Offer”), the tender generally should be treated as a taxable sale or exchange that is subject to the rules described below under “—Sale or Exchange Treatment.” Otherwise, the sale will be treated as a distribution subject to the rules described below under “—Distribution Treatment.”
Sale or Exchange Treatment
If the tender of Securities pursuant to the Offer is treated as a sale or exchange of such Securities by the Non-U.S. Holder pursuant to the rules discussed above, any gain realized by such Non-U.S. Holder (except to the extent of any cash attributable to declared but unpaid dividends, which would be treated as a distribution that is subject to the rules set forth below under “—Distribution Treatment”) generally will not be subject to U.S. federal income tax unless such stock constitutes a United States real property interest (a “
USRPI
”) under certain rules of the Code known as the Foreign Investment in Real Property Tax Act (“
FIRPTA
”). In general, stock of a domestic corporation that constitutes a “United States real property holding corporation” (a “
USRPHC
”) will constitute a USRPI. The Company believes that it is a USRPHC. Its Securities will not, however, constitute a USRPI so long as the Company is a “domestically controlled qualified investment entity.” A “domestically controlled qualified investment entity” includes a REIT in which at all times during a five-year testing period less than 50% in value of its stock is held directly or indirectly by non-United States persons, subject to certain ownership rules. For purposes of determining whether a REIT is a “domestically controlled qualified investment entity,” ownership by non-United States persons generally will be determined by looking through certain pass-through entities and U.S. corporations, including non-public REITs and certain non-public foreign-controlled domestic C corporations, and treating a public qualified investment entity as a non-United States person unless such entity is a “domestically controlled qualified investment entity.” Notwithstanding the foregoing ownership rules, a person who at all applicable times holds less than 5% of a class of a REIT’s stock that is “regularly traded” on an established securities market in the United States is treated as a United States person unless the REIT has actual knowledge that such person is not a United States person or is a foreign-controlled person. Because the Common Stock is (and, the Company anticipates, will continue to be) publicly traded, no assurance can be given that it will continue to be a “domestically controlled qualified investment entity.”
Even if the Company does not qualify as a “domestically controlled qualified investment entity” at the time a Non-U.S. Holder tenders the Securities, gain realized from the sale or other taxable disposition by a Non-U.S. Holder of such Securities would not be subject to U.S. federal income tax under FIRPTA as a sale of a USRPI if:
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(1)
|
the Securities are “regularly traded,” as defined by applicable Treasury Regulations, on an established securities market such as the NYSE; and
|
|
(2)
|
such Non-U.S. Holder owned, actually and constructively, 10% or less of the Securities throughout the shorter of the five-year period ending on the date of the sale or other taxable disposition or the Non-U.S. Holder’s holding period.
|
34
(2) at the time that a Non-U.S. Holder acquired the Securities and at certain other times described in the applicable Treasury Regulations, the aggregate fair market value of Securities held (actually or constructively) by such Non-U.S. Holder did not exceed 10% of the total value of the Common Stock. Holders that acquired their Securities in exchange for RPT Preferred Shares in the RPT Merger should consult their tax advisors regarding the application of these rules to a disposition of their Securities in the Offer.
In addition, dispositions of the Securities by certain non-U.S. publicly traded shareholders that meet certain record-keeping and other requirements (“
qualified shareholders
”) are exempt from FIRPTA, except to the extent owners of such qualified shareholders that are not also qualified shareholders own, actually or constructively, more than 10% of the Company’s capital stock. Furthermore, dispositions of the Securities by certain “qualified foreign pension funds” or entities all of the interests of which are held by such “qualified foreign pension funds” are exempt from FIRPTA. Non-U.S. Holders should consult their tax advisors regarding the application of these rules.
If gain on the tender of the Securities were subject to taxation under FIRPTA, the Non-U.S. Holder would be required to file a U.S. federal income tax return and would be subject to regular U.S. federal income tax with respect to such gain in the same manner as a taxable U.S. Holder (subject to any applicable alternative minimum tax and a special alternative minimum tax in the case of nonresident alien individuals). In addition, if the tender of the Securities were subject to taxation under FIRPTA, and if the Securities were not “regularly traded” on an established securities market, the Company generally would be required to withhold and remit to the IRS 15% of the purchase price.
Notwithstanding the foregoing, gain from the tender of the Securities not otherwise subject to FIRPTA will be taxable to a Non-U.S. Holder if either (a) the investment in the Securities is treated as effectively connected with the conduct by the Non-U.S. Holder of a trade or business within the United States (and, if required by an applicable income tax treaty, the Non-U.S. Holder maintains a permanent establishment in the United States to which such gain is attributable), in which case the Non-U.S. Holder will be subject to the same treatment as U.S. Holders with respect to such gain, except that a Non-U.S. Holder that is a corporation may also be subject to the 30% branch profits tax (or such lower rate as may be specified by an applicable income tax treaty) on such gain, as adjusted for certain items, or (b) the Non-U.S. Holder is a nonresident alien individual who is present in the United States for 183 days or more during the taxable year and certain other conditions are met, in which case the Non-U.S. Holder will be subject to a 30% tax on the Non-U.S. Holder’s capital gains (or such lower rate specified by an applicable income tax treaty), which may be offset by U.S. source capital losses of the Non-U.S. Holder (even though the individual is not considered a resident of the United States), provided the Non-U.S. Holder has timely filed U.S. federal income tax returns with respect to such losses. In addition, even if the Company is a domestically controlled qualified investment entity, upon disposition of its Securities, a Non-U.S. Holder may be treated as having gain from the sale or other taxable disposition of a USRPI if the Non-U.S. Holder (1) disposes of such stock within a 30-day period preceding the ex-dividend date of a distribution, any portion of which, but for the disposition, would have been treated as gain from the sale or exchange of a USRPI and (2) acquires, or enters into a contract or option to acquire, or is deemed to acquire, other shares of that stock during the 61-day period beginning with the first day of the 30-day period described in clause (1), unless the Securities are “regularly traded” and the Non-U.S. Holder did not own more than 10% of the Securities at any time during the one-year period ending on the date of the distribution described in clause (1).
Distribution Treatment
Distributions Generally
. Payments that a Non-U.S. Holder of Securities receives pursuant to the Offer that are treated as distributions pursuant to the rules discussed above (and which are neither attributable to gains from sales or exchanges by us of USRPIs nor with certain exceptions, designated by the Company as capital gain dividends) will be treated as a dividend of ordinary income to the extent made from the Company’s current or accumulated earnings and profits. Such distributions ordinarily will be subject to withholding of U.S. federal income tax at a 30% rate or such lower rate as may be specified by an applicable income tax treaty, unless the distributions are treated as effectively connected with the conduct by the Non-U.S. Holder of a trade or business within the United States (and, if required by an applicable income tax treaty, the Non-U.S. Holder maintains a permanent establishment in the United States to which such dividends are attributable). Under certain treaties, however, lower withholding rates generally applicable to dividends do not apply to dividends from a REIT. Certain certification and disclosure requirements must be satisfied for a Non-U.S. Holder to be exempt from withholding under the effectively connected income exemption. Dividends that are treated as effectively connected with a U.S. trade or business generally will not be subject to withholding but will be subject to U.S. federal income tax on a net basis at the regular rates, in the same manner as dividends paid to U.S. Holders are subject to U.S. federal income tax. Any such dividends received
35
by a Non-U.S. Holder that is a corporation may also be subject to an additional branch profits tax at a 30% rate (applicable after deducting U.S. federal income taxes paid on such effectively connected income) or such lower rate as may be specified by an applicable income tax treaty.
Distributions in excess of the Company’s current and accumulated earnings and profits will not be taxable to a Non-U.S. Holder to the extent that such distributions do not exceed the adjusted tax basis of the holder’s Securities, but rather will reduce the adjusted tax basis of such stock. To the extent that such distributions exceed the Non-U.S. Holder’s adjusted tax basis in such stock, they generally will give rise to gain from the sale or exchange of such stock, the tax treatment of which is described above. However, such excess distributions may be treated as dividend income for certain Non-U.S. Holders.
Capital Gain Dividends and Distributions Attributable to the Sale or Exchange of United Stats Real Property Interests
. Distributions to a Non-U.S. Holder that the Company properly designates as capital gain dividends, other than those arising from the disposition of a USRPI, generally should not be subject to U.S. federal income taxation, unless:
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(1)
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the investment in the Securities is treated as effectively connected with the conduct by the Non-U.S. Holder of a trade or business within the United States (and, if required by an applicable income tax treaty, the Non-U.S. Holder maintains a permanent establishment in the United States to which such dividends are attributable), in which case the Non-U.S. Holder will be subject to the same treatment as U.S. Holders with respect to such gain, except that a Non-U.S. Holder that is a corporation may also be subject to a branch profits tax of up to 30%, as discussed above; or
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(2)
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the Non-U.S. Holder is a nonresident alien individual who is present in the United States for 183 days or more during the taxable year and certain other conditions are met, in which case the Non-U.S. Holder will be subject to U.S. federal income tax at a rate of 30% on the Non-U.S. Holder’s capital gains (or such lower rate specified by an applicable income tax treaty), which may be offset by U.S. source capital losses of such Non-U.S. Holder (even though the individual is not considered a resident of the United States), provided the Non-U.S. Holder has timely filed U.S. federal income tax returns with respect to such losses.
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Holders tender Securities held in a United States brokerage account or otherwise through a United States broker, dealer, commercial bank, trust company, or other nominee, such Non-U.S. Holders should consult such United States broker or other nominee and their own tax advisors to determine the particular withholding procedures that will be applicable to them.
A Non-U.S. Holder may be eligible to obtain a refund of all or a portion of any United States federal tax withheld if such stockholder meets the “complete termination,” “substantially disproportionate” or “not essentially equivalent to a dividend” tests described above under “—U.S. Holders—Tender of Securities Pursuant to the Offer” or if the holder is entitled to a reduced rate of withholding pursuant to any applicable income tax treaty and a higher rate was withheld. Non-U.S. Holders are urged to consult their tax advisors regarding the United States federal income tax consequences of participation in the Offer, including the application of United States federal income tax withholding rules, eligibility for a reduction of or an exemption from withholding tax, and the refund procedure, as well as the applicability and effect of state, local, foreign and other tax laws.
Backup Withholding
See
“U.S. Federal Backup Withholding” in Section 6 for a discussion on the application of U.S. federal backup withholding to payments made pursuant to the Offer.
Additional Withholding Tax on Payments Made to Foreign Accounts
Withholding taxes may be imposed under Sections 1471 to 1474 of the Code (such sections commonly referred to as the Foreign Account Tax Compliance Act (“
FATCA
”)) on certain types of payments made to non-U.S. financial institutions and certain other non-U.S. entities. Specifically, a 30% withholding tax may be imposed on dividends on the Securities or (subject to the proposed Treasury Regulations discussed below) gross proceeds from the sale or other disposition of the Securities, in each case paid to a “foreign financial institution” or a “non-financial foreign entity” (each as defined in the Code), unless (1) the foreign financial institution undertakes certain diligence and reporting obligations, (2) the non-financial foreign entity either certifies it does not have any “substantial United States owners” (as defined in the Code) or furnishes identifying information regarding each substantial United States owner, or (3) the foreign financial institution or non-financial foreign entity otherwise qualifies for an exemption from these rules. If the payee is a foreign financial institution and is subject to the diligence and reporting requirements in clause (1) above, it must enter into an agreement with the U.S. Department of the Treasury requiring, among other things, that it undertake to identify accounts held by certain “specified United States persons” or “United States owned foreign entities” (each as defined in the Code), annually report certain information about such accounts, and withhold 30% on certain payments to non-compliant foreign financial institutions and certain other account holders. Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States governing FATCA may be subject to different rules.
Under the applicable Treasury Regulations and administrative guidance, withholding under FATCA generally applies to payments of dividends on stock. While withholding under FATCA would have applied also to payments of gross proceeds from the sale or other disposition of stock on or after January 1, 2019, proposed Treasury Regulations eliminate FATCA withholding on payments of gross proceeds entirely. Taxpayers generally may rely on these proposed Treasury Regulations until final Treasury Regulations are issued. Because, as discussed above, an applicable withholding agent may treat amounts paid to Non-U.S. Holders pursuant to the Offer as dividends for United States federal income tax purposes, such amounts may also be subject to withholding under FATCA if such requirements are not met. In such case, any withholding under FATCA may be credited against, and therefore reduce, any 30% withholding tax on dividend distributions as discussed above.
Investors should consult their tax advisors regarding the potential application of withholding under FATCA to the tender of the Securities.
Non-Participation in the Offer
Holders who do not participate in the Offer generally would not be expected to incur any U.S. federal income tax liability as a result of the consummation of the Offer. However, in the event that the payment by the Company for any purchase of Securities pursuant to the Offer is treated as a taxable dividend to a holder rather than as a sale or exchange, the other holders, including the holders who do not participate in the Offer, could be deemed to have received taxable stock distributions under certain circumstances. Holders are urged to consult their tax advisors regarding the consequences to them of the Offer and the Preferred Amendment, including the possibility of deemed distributions resulting from the purchase of Securities pursuant to the Offer.
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Extension of the Offer and Consent Solicitation; Termination; Amendment.
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•
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the Company increases or decreases (i) the price to be paid for the Securities or (ii) the Soliciting Broker Fee, and
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•
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the Offer and Consent Solicitation is scheduled to expire at any time earlier than the expiration of a period ending on the tenth business day from, and including, the date that the notice of an increase or decrease is first published, sent or given to securityholders in the manner specified in this Section 16,
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the Offer and Consent Solicitation will be extended until the expiration of such ten business day period.
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Fees and Expenses.
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that are appropriately designated by their tendering holder clients to receive this fee, provided that such fee will only be paid with respect to tenders by holders of 10,000 Securities or fewer. The Company will, in its sole and absolute discretion, determine whether a broker has satisfied the criteria for being eligible to receive a Soliciting Broker Fee.
A soliciting broker is a broker or dealer in securities which is a member of any national securities exchange or of the Financial Industry Regulatory Authority, or a bank or trust company. Each soliciting broker will confirm that each holder that it solicits has received a copy of this Offer to Purchase and Consent Solicitation, or concurrently with such solicitation provides the holder with a copy of this Offer to Purchase and Consent Solicitation. No soliciting broker is required to make any recommendation to holders as to whether to tender its Securities or refrain from tendering its Securities in the Offer or whether to give a consent or withhold a consent with respect to the Consent Solicitation. No assumption is made, in making payments to any soliciting broker, that its activities in connection with the Offer and Consent Solicitation included any activities other than those described in this paragraph. For all purposes noted in materials relating to the Offer and Consent Solicitation, the term “solicit” shall be deemed to mean no more than “processing tenders” or “forwarding to customers material regarding the Offer.”
Soliciting brokers are not eligible to receive a Soliciting Broker Fee with respect to Securities beneficially owned by such soliciting broker or with respect to any Securities that are registered in the name of a soliciting broker unless such Securities are held by such soliciting broker as nominee and the related Securities are tendered on behalf of the beneficial owner of such Securities.
Soliciting brokers should take care to ensure that proper records are kept to document their eligibility to receive any Soliciting Broker Fee. The Company and the Information Agent and Tender Agent reserve the right to require additional information at their discretion, as deemed warranted.
No fees or commissions will be payable by the Company to brokers, dealers, commercial banks or trust companies (other than the Soliciting Broker Fee and fees to the Information Agent and the Tender Agent, as described above) for soliciting or recommending tenders of Securities under the Offer and Consent Solicitation. We recommend that investors who hold Securities through brokers, dealers, commercial banks, trust companies or other nominees consult the brokers, dealers, commercial banks, trust companies or other nominees to determine whether transaction costs are applicable if holders of Securities tender Securities through such brokers or banks and not directly to the Tender Agent. The Company, however, upon request, will reimburse brokers, dealers, commercial banks, trust companies and other nominees for customary mailing and handling expenses incurred by them in forwarding this Offer to Purchase and Consent Solicitation and the Letter of Transmittal and Consent and related materials to the beneficial owners of Securities held by them as a nominee or in a fiduciary capacity. No broker, dealer, commercial bank or trust company has been authorized to act as an agent of the Company, dealer manager, Information Agent, or Tender Agent for purposes of the Offer and Consent Solicitation.
The expenses estimated to be incurred by the Company in connection with the Offer and Consent Solicitation are described in the following table. The Company has paid, or will be responsible for paying, any or all such expenses.
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SEC Filing fee
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$
17,500
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Professional Services fees (including Legal, Accounting and Dealer Manager fees)
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$750,000
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Solicitation expenses (other than Dealer Manager fees)
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$
37,500
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Printing and mailing expenses
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$
25,000
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Total
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$830,000
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Rule 14e-4 “Net Long Position” Requirement.
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The tender of Securities and consent to the Preferred Amendment and the Deposit Agreement Amendment, pursuant to any of the procedures described above, will constitute a binding agreement between you and the Company upon the terms and subject to the conditions of the Offer and Consent Solicitation.
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Where You Can Find Additional Information.
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Kimco Realty Corporation’s and Kimco OP’s Annual Report on Form 10-K for the year ended December 31, 2023 (filed with the SEC on
February 26, 2024
);
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•
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The information specifically incorporated by reference into Kimco Realty Corporation’s and Kimco OP’s Annual Report on Form 10-K for the year ended December 31, 2023 from Kimco Realty Corporation’s Definitive Proxy Statement on Schedule 14A, filed with the SEC on
March 25, 2024
;
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•
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Kimco Realty Corporation’s and Kimco OP’s Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2024 (filed with the SEC on
May 3, 2024
, as amended on
May 13, 2024
), June 30, 2024 (filed with the SEC on
August 2, 2024
) and September 30, 2024 (filed with the SEC on
October 31, 2024
; and
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•
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Kimco Realty Corporation’s and Kimco OP’s Current Reports on Form 8-K filed with the SEC on
January 3, 2024
(excluding the information furnished pursuant to Item 7.01 and the related exhibits),
February 8, 2024
,
May 9, 2024
,
July 19, 2024
(excluding the information furnished pursuant to Item 7.01 and the related exhibit),
September 5, 2024
(excluding the information furnished pursuant to Item 7.01 and the related exhibit),
September 13, 2024
(excluding the information furnished pursuant to Item 7.01 and the related exhibit) and
September 17, 2024
.
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Please note that the Schedule TO to which this Offer to Purchase and Consent Solicitation relates does not permit forward “incorporation by reference.” If a material change occurs in the information set forth in this Offer to Purchase and Consent Solicitation, we will amend the Schedule TO accordingly.
Any statement contained in a document incorporated or considered to be incorporated by reference in this Offer to Purchase and Consent Solicitation shall be considered to be modified or superseded for purposes of this Offer to Purchase and Consent Solicitation to the extent that a statement contained in this Offer to Purchase and Consent Solicitation is or is considered to be incorporated by reference modifies or supersedes such statement. Any statement that is modified or superseded will not, except as so modified or superseded, constitute a part of this Offer to Purchase and Consent Solicitation. Nothing herein shall be deemed to incorporate information furnished to, but not filed with, the SEC, unless otherwise specifically indicated in such document. The Company will provide to each person, including any beneficial owner, to whom this Offer to Purchase and Consent Solicitation is delivered, at no cost upon his or her written or oral request, a copy of any of the documents that are incorporated by reference in this Offer to Purchase and Consent Solicitation, other than exhibits to such documents that are not specifically incorporated by reference into this Offer to Purchase and Consent Solicitation, and the Company’s constitutional documents. You may request such documents by contacting us at:
Kimco Realty Corporation
500 N. Broadway
Jericho, New York 11753
(516) 869-9000
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