Kite Realty Group, Inland Diversified To Merge $2.1 Bln Stock-for-stock Deal

(RTTNews) - Kite Realty Group Trust (KRG) announced Monday that it has entered into definitive merger agreement with Inland Diversified Real Estate Trust, Inc., by which Inland Diversified will merge with and into a wholly owned subsidiary of Kite Realty in a stock-for-stock merger with a transaction value of approximately $2.1 billion and an equity value of approximately $1.2 billion.

The Merger is currently expected to close late in the second quarter or in the third quarter of 2014, subject to the approval of shareholders of both companies and the satisfaction of other customary closing conditions.

Kite Realty expects the Merger to result in a number of strategic and financial benefits for Kite Realty shareholders.

As per the terms of the merger agreement, Inland Diversified's stockholders will receive newly issued common shares of beneficial interest of Kite Realty in exchange for each share of Inland Diversified common stock based on the following: 1.707 shares of Kite Realty for each share of Inland Diversified common stock, so long as the reference price for Kite Realty's shares is equal to or less than $6.36.

A floating ratio if Kite Realty's reference price is more than $6.36 or less than $6.58; such ratio determined by dividing $10.85 by the Kite Realty reference price; 1.650 shares of Kite Realty for each share of Inland Diversified common stock if Kite Realty's reference price is $6.58 or greater.

Based on Kite Realty's closing share price of $6.15 on February 7, 2014, this represents an implied price per share of $10.50 for each share of Inland Diversified common stock. Based on the maximum and minimum exchange ratios of 1.707 and 1.650, Kite Realty's shareholders are expected to own between 40.6% and 41.4% of the combined company's diluted common equity.

Upon the closing, Kite Realty's Board of Trustees will consist of nine members, six of whom will be current trustees of Kite Realty and three of whom will be designated by Inland Diversified.

John A. Kite, Kite Realty's current CEO and Chairman of the Board of Trustees, will serve as CEO and Chairman of the Board of Trustees of the combined company, Thomas K. McGowan, Kite Realty's current President and COO, will serve as President and COO of the combined company, and Daniel R. Sink, Kite Realty's current Executive Vice President and CFO, will serve as Executive Vice President and CFO of the combined company.

Upon completion of the Merger, the combined company will retain the Kite Realty name and will continue to trade under the NYSE ticker symbol KRG. The combined company's corporate headquarters will remain in Indianapolis, Indiana, Kite Realty Group noted.