Glimcher Realty Trust (NYSE:GRT) Up on Acquisition Annoucement


A 34 percent premium was offered for Glimcher Realty Trust (NYSE:GRT) by the Washington Prime Group Inc, a real estate investment trust based in Maryland.  The deal is valued at $4.3B.  The new company name will be WP Gilmcher, marrying the two merging companies.

Their new office location will be at: Continental Plaza at 180 E. Broad St.

Their assortment of property includes 119 commercial properties and 58 million sq ft of locations that can be rented out, according to a spokesperson at the company.

Gilmcher believes that there will be

“Immediate benefit to the shareholders who participate in the deal, when we consider the future growth prospects of the company.”

The shares have jumped from $10.59 to $14.20,  34 percent gain.  Washington Prime (NYSE:WPG) also agreed to obtain all of Gilmcher’s debt.

In addition to the above deals, Simon Property Group (NYSE: SPG) has agreed to purchase Jersey Gardens and University Park Village in a deal that will cost them $1.1B.  This unique deal will benefit the company to help pay off their existing debt.

To improve the company’s management structure, the companies will incorporate senior management and support roles into the property management roles at Gilmcher.  They will also decide to continue selling off non-important company assets that may distract them from their main focus.

Both companies feel this merger will help them combine front and back offices reducing overall costs.  Currently Simon is providing the back office support for Washington Park.

This deal is expected to finalize by the early quarter of 2015.  Washington Park plans to tap into its network to finance the purchase of Gilmcher.  They will be doing join venture partnerships, capital market sales, finding further institutional partners, and utilizing a $1.25B loan from Citi Bank.

Their Core Mall portfolio has been up 4.3% since last quarter.  Diversification has been the key for them through diversification, acquisitions and utilizing their capital in the smartest manner possible.  Selling off unused malls have been the key for them to refocus on important properties.

Occupancy for the malls have been up to 95%.  As a mall REIT, their 31 properties mostly in Ohio have been making waves.  The $1.58B market cap REIT suffered from the recession but has made great recovery since.  From their peak of $1.92 per share dividends, the REIT is now paying out a mere $0.40 per share.  With a current multiple of 14.4x based on their share price of $10.88, Gilmcher has been seen as undervalued for quite some time.  Some people have considered the company to be overvalued and should be trading in line with their smaller peers such as Rouse (NYSE:RSE) and CBL Properties (NYSE:CBL).