Announcement • Aug 19
Regency Centers Corporation (NasdaqGS:REG) completed the acquisition of Urstadt Biddle Properties Inc. (NYSE:UBA) from a group of shareholders. Regency Centers Corporation (NasdaqGS:REG) entered into definitive agreement to acquire Urstadt Biddle Properties Inc. (NYSE:UBA) from a group of shareholders for approximately $800 million on May 17, 2023. Under the terms of the agreement, Urstadt Biddle’s Class A Common and Common stockholders will receive 0.347 of a newly-issued REG share for each share they own. Upon closing, Regency and Urstadt Biddle shareholders will own approximately 93% and 7% of the combined company, respectively. The transaction is expected to be non-taxable to Urstadt Biddle shareholders. There are no anticipated changes to Regency’s executive management team or Board of Directors. In case of termination under certain circumstances, UBA will be required to pay Regency a termination fee of $31,600,000.The transaction is subject to the receipt of approval of Urstadt Biddle’s Class A Common and Common stockholders; the effectiveness of a registration statement on Form S-4 to register the issuance of Regency Common Stock, Regency Series A Preferred Stock and Regency Series B Preferred Stock in connection with the Mergers; the shares of Regency Common Stock, Regency Series A Preferred Stock and Regency Series B Preferred Stock to be issued in the Second Merger have been approved for listing on Nasdaq; satisfaction of other customary closing conditions. The respective Boards of Directors of both Regency and Urstadt Biddle have each approved the transaction. Regency, Willing L. Biddle, Catherine U. Biddle, Elinor F. Urstadt, Urstadt Property Company, Inc., Urstadt Realty Associates Co LP and Urstadt Realty Shares II L.P. collectively representing approximately 68% of the voting power of UBA, have agreed to vote in favor of any proposal to approve the Merger. The shareholders of Urstadt Biddle Properties approved the transaction at a Special Meeting of Stockholders held on August 16, 2023. The transaction is currently expected to close late in the third quarter or early in the fourth quarter of 2023. The transaction is expected to be immediately accretive to Core Operating Earnings Including approximately $9 million of annual cost savings benefit.RBC Capital Markets and Wells Fargo Securities are acting as financial advisors and Adam O. Emmerich and David K. Lam of Wachtell, Lipton, Rosen & Katz is serving as legal advisor to Regency Centers. Eastdil Secured and Deutsche Bank are acting as financial advisors and David Bonser, Cristina Arumi, Lauren Clarke, Martha Steinman, Matthew Bowles and Stacey McEvoy Hogan Lovells US LLP is serving as legal advisor to Urstadt Biddle. Eastdil Secured Advisors LLC acted as fairness opinion provider to UBA. Urstadt Biddle has agreed to pay Eastdil Secured for its financial advisory services in connection with the mergers an aggregate fee currently estimated to be approximately $7 million, a portion of which was payable upon delivery of its opinion and approximately $6.25 million of which is contingent upon consummation of the mergers. Robert Katz and Adam Rachlis of Latham & Watkins LLP represented Eastdil Secured. The transfer agent for Regency common stock is Broadridge Corporate Issuer Solutions, Inc.Regency Centers Corporation (NasdaqGS:REG) completed the acquisition of Urstadt Biddle Properties Inc. (NYSE:UBA) from a group of shareholders on August 18, 2023. New Risk • Jun 09
New minor risk - Profit margin trend The company's profit margins are lower than last year and have reduced by more than 30%. Net profit margin: 18% Last year net profit margin: 26% This is considered a minor risk. A large drop in profit margin could indicate the company does not have strong competitive advantages or it is yet to establish itself and its core business. Even if it is a well established business, this may make it a much riskier investment than one that has a combination of proven competitive advantages and a stable or growing profit margin. Currently, the following risks have been identified for the company: Minor Risks High level of debt (50% net debt to equity). Unstable dividend paying track record with dividend experiencing an annual drop of over 20% in the past. Profit margins are more than 30% lower than last year (18% net profit margin). Reported Earnings • Jun 09
Second quarter 2023 earnings: EPS and revenues miss analyst expectations Second quarter 2023 results: FFO per share: US$0.3 (down from US$0.37 in 2Q 2022). Revenue: US$35.5m (down 2.2% from 2Q 2022). Funds from operations (FFO): US$13.1m (down 7.9% from 2Q 2022). FFO margin: 37% (down from 39% in 2Q 2022). The decrease in margin was primarily driven by lower revenue. Revenue missed analyst estimates by 2.8%. Earnings per share (EPS) also missed analyst estimates by 46%. Revenue is forecast to grow 2.8% p.a. on average during the next 3 years, compared to a 4.3% growth forecast for the Retail REITs industry in the US. Over the last 3 years on average, earnings per share has increased by 29% per year but the company’s share price has only increased by 21% per year, which means it is significantly lagging earnings growth. 
