UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 1, 2017
Equity One, Inc.
(Exact Name of Registrant as Specified in Charter)
Maryland
(State or Other Jurisdiction of Incorporation)
| 001-13499 | 52-1794271 | |
| (Commission File Number) |
(I.R.S. Employer Identification No.) |
| 410 Park Avenue, Suite 1220 New York, NY |
10022 | |
| (Address of Principal Executive Offices) | (Zip Code.) |
(212) 796-1760
(Registrant’s telephone number, including area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 1.02. | Termination of a Material Definitive Agreement. |
On March 1, 2017, in connection with the closing of the Merger (as defined below), Equity One, Inc. (the “Company” or “Equity One”) terminated (i) the Amended and Restated Loan Agreement, dated as of December 10, 2014, by and among, inter alios, Equity One, as borrower, the financial institutions party thereto, as lenders, and PNC Bank, National Association, as administrative agent, as amended as of September 16, 2016, (ii) the Loan Agreement, dated as of December 2, 2015, by and among, inter alios, Equity One, as borrower, the financial institutions party thereto, as lenders, and PNC Bank, National Association, as administrative agent, as amended as of September 16, 2016, and (iii) the Fifth Amended and Restated Loan Agreement, dated as of September 16, 2016, by and among, inter alios, Equity One, as borrower, the financial institutions party thereto, as lenders, and Wells Fargo Bank, National Association, as administrative agent.
On March 1, 2017, in connection with the closing of the Merger (as defined below), Equity One also terminated (i) the Registration Rights Agreement, dated October 28, 2002, between the Company and certain purchasers, (ii) the Registration Rights Agreement made as of September 23, 2008 by and among the Company and MGN America LLC, (iii) the Common Stock Purchase Agreement made as of September 23, 2008 by and between the Company and MGN America, LLC, (iv) the Common Stock Purchase Agreement, dated as of April 8, 2009, between the Company and MGN America, LLC, (v) the Registration Rights Agreement, dated as of April 8, 2009, between the Company and MGN America, LLC, (vi) the Common Stock Purchase Agreement, dated as of March 9, 2010, between the Company and MGN America, LLC, (vii) the Common Stock Purchase Agreement, dated as of March 9, 2010, between the Company and Silver Maple (2001), Inc., (viii) the Registration Rights Agreement, dated as of March 9, 2010, by and among the Company, MGN America, LLC and Silver Maple (2001), Inc., (ix) the Common Stock Purchase Agreement, dated as of December 8, 2010, between the Company and MGN America, LLC, (x) the Registration Rights Agreement, dated as of December 8, 2010, by and among the Company and MGN America, LLC, (xi) the Common Stock Purchase Agreement, dated as of May 18, 2011, between the Company and MGN (USA), Inc., (xii) the Registration Rights Agreement, dated as of May 18, 2011, by and among the Company and MGN (USA), Inc., (xiii) the Common Stock Purchase Agreement, dated as of November 10, 2015, between the Company and MGN America, LLC, and (xiv) the Registration Rights Agreement, dated as of November 10, 2015, between the Company and MGN America, LLC.
| Item 2.01. | Completion of Acquisition or Disposition of Assets. |
As previously disclosed, on November 14, 2016, Equity One entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Regency Centers Corporation (“Regency”), pursuant to which, upon the terms and subject to the conditions thereof, the Company merged with and into Regency, with Regency continuing as the surviving corporation in the merger (the “Merger”).
At the effective time (the “Effective Time”) of the Merger on March 1, 2017, each share of the common stock, par value $0.01 per share, of Equity One (the “Equity One Common Stock”) issued and outstanding immediately prior to the Effective Time (other than shares of Equity One owned directly by Equity One and in each case not held on behalf of third parties) was converted into the right to receive 0.45 (the “Exchange Ratio”) of a newly issued share of the common stock, par value $0.01 per share, of Regency (the “Merger Consideration”).
The foregoing description of the Merger and the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which is filed as Exhibit 2.1 to the Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission (the “SEC”) by Regency on November 15, 2016, and which is incorporated herein by reference.
| Item 3.01. | Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing. |
In connection with the consummation of the Merger, the Company requested that the New York Stock Exchange (the “NYSE”) suspend trading of the Equity One Common Stock effective prior to the opening of trading on March 2, 2017, remove the Equity One Common Stock from listing on the NYSE, and file a notification of removal from listing on Form 25 with the SEC with respect to the delisting of the Equity One Common Stock and the deregistration of the Equity One Common Stock under Section 12(b) of the Exchange Act. Regency, as successor to the Company, intends to file with the SEC a certification on Form 15 under the Exchange Act, requesting the deregistration of the Equity One Common Stock and suspending the Company’s reporting obligations under Section 13 and 15(d) of the Exchange Act.
The information set forth in Item 2.01 of this Current Report on Form 8-K is incorporated by reference in this Item 3.01.
| Item 3.03. | Material Modification to Rights of Security Holders. |
As set forth in Item 2.01 of this Current Report on Form 8-K, upon the Effective Time, each share of Equity One Common Stock issued and outstanding immediately prior to the Effective Time (other than shares of Equity One owned directly by Equity One or Regency and in each case not held on behalf of third parties) was canceled and converted into the right to receive 0.45 of a newly issued share of the common stock of Regency. At the Effective Time:
| (i) | each Equity One stock option, whether vested or unvested, that was outstanding and unexercised as of immediately prior to the Effective Time of the Merger vested in full and was converted into the right to receive an amount in cash equal to the product of the number of shares of Equity One Common Stock subject to such Equity One stock option and the excess of (i) (x) the value of a share of Regency common stock as of the last complete trading day prior to the Effective Time of the Merger, multiplied by (y) the Exchange Ratio, over (ii) the exercise price per share of Equity One Common Stock of such Equity One stock option; |
| (ii) | each Equity One restricted stock award that was outstanding as of immediately prior to the Effective Time of the Merger was assumed by Regency and was converted into a Regency restricted stock award with respect to a number of shares of Regency common stock (rounded to the nearest whole share) equal to the product obtained by multiplying the number of shares of Equity One Common Stock subject to such Equity One restricted stock award as of immediately prior to the Effective Time of the Merger by the Exchange Ratio, except that Equity One restricted stock awards held by certain Equity One officers and Equity One’s directors vested in full at the Effective Time; |
| (iii) | each long term incentive plan award (“LTIP”) relating to shares of Equity One Common Stock outstanding immediately prior to the Effective Time vested in full (based on the actual achievement of any applicable performance goals, and without proration) and was converted into a number of fully vested shares of Regency common stock equal to the product obtained by multiplying the number of shares of Equity One Common Stock subject to the LTIP award as of immediately prior to the Effective Time of the Merger by the Exchange Ratio. |
The information set forth in Items 2.01, 3.01 and 5.01 of this Current Report on Form 8-K is incorporated by reference in this Item 3.03.
| Item 5.01. | Changes in Control of Registrant. |
The information set forth in Items 2.01, 3.01 and 3.03 of this Current Report on Form 8-K are incorporated by reference into this Item 5.01.
| Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
In connection with the completion of the Merger, the Regency board of directors appointed Joseph Azrack, Chaim Katzman and Peter Linneman, former Equity One directors, to serve on Regency’s board. Mr. Katzman, the former Chairman of Equity One’s board, was appointed non-executive Vice Chairman of the Regency board. As of the Effective Time and in connection with the Merger, the officers of Regency immediately prior to the Effective Time became the officers of the surviving corporation.
| Item 8.01. | Other Events. |
On March 1, 2017, Regency and Equity One released a joint press release announcing the completion of the Merger, which is attached hereto as Exhibit 99.1 and incorporated by reference herein.
| Item 9.01 | Financial Statements and Exhibits |
(d) Exhibits.
| Exhibit No. |
Description | |
| 2.1 | Agreement and Plan of Merger, dated as of November 14, 2016, by and between Regency and Equity One (incorporated herein by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by Regency on November 15, 2016). | |
| 99.1 | Joint Press Release of Regency Centers Corporation and Equity One, Inc., issued March 1, 2017. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| REGENCY CENTERS CORPORATION as successor by merger to Equity One, Inc. | ||||||
| Date: March 1, 2017 | By: | /s/ J. Christian Leavitt | ||||
| Name: J. Christian Leavitt | ||||||
| Title: Senior Vice President and Treasurer (Principal Accounting Officer) | ||||||
EXHIBIT INDEX
| Exhibit |
Description | |
| 2.1 | Agreement and Plan of Merger, dated as of November 14, 2016, by and between Regency and Equity One (incorporated herein by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by Regency on November 15, 2016). | |
| 99.1 | Joint Press Release of Regency Centers Corporation and Equity One, Inc., issued March 1, 2017. | |
Exhibit 99.1
Regency Centers and Equity One Announce Closing of Merger
JACKSONVILLE, FL and NEW YORK, NY (March 1, 2017) – Regency Centers Corporation (NYSE: REG) (“Regency”) and Equity One, Inc. (NYSE: EQY) (“Equity One”) today announced the completion of their previously announced merger, whereby Equity One merged with and into Regency, with Regency continuing as the surviving public company. The merger forms a combined company with a total market capitalization of approximately $16 billion. Beginning March 2, 2017, Regency will be a member of the S&P 500 index.
“We are delighted to announce the completion of our merger with Equity One, further establishing Regency Centers as the preeminent national shopping center REIT,” stated Martin E. “Hap” Stein, Jr., Chairman and Chief Executive Officer. “With a high quality portfolio of 429 properties located in many of the country’s top markets, featuring outstanding demographics, augmented by a best-in-class development and redevelopment program, we believe Regency offers a unique long-term growth profile. Further, as we have stated before, we expect the transaction to be accretive to core FFO per share while preserving our sector-leading balance sheet. Moving ahead, we look forward to the rapid integration of the two platforms and to creating additional value for our shareholders over the quarters and years to come.”
The completion of the transaction follows the satisfaction of all conditions to the closing of the merger, including receipt of approvals of the merger and other merger-related proposals by Regency and Equity One stockholders, which approvals were obtained on February 24, 2017.
Pursuant to the terms of the definitive merger agreement entered into by and between Regency and Equity One on November 14, 2016, Equity One stockholders are entitled to receive 0.45 of a newly issued share of Regency common stock for each share of Equity One common stock that they owned immediately prior to the effective time of the merger. The common stock of the combined company will trade under the symbol “REG” on the NYSE, and the Equity One common stock will be suspended from trading on the NYSE effective as of the opening of trading on March 2, 2017.
In connection with the completion of the merger, the Regency board of directors has appointed Joseph Azrack, Chaim Katzman and Peter Linneman, former Equity One directors, to serve on Regency’s board. Mr. Katzman, the former Chairman of Equity One’s board, will serve as non-executive Vice Chairman of the Regency board. Regency’s current executive officers will continue to serve in their current positions.
Following the merger, Regency now expects the combined portfolio to produce annual Same Property NOI growth for 2017 within a new range of 3.0% to 3.8%. This compares to previous guidance for Regency as a stand-alone entity of 2.25% to 3.00%. Regency expects to realize annualized cost savings of approximately $27 million by 2018, primarily related to the elimination of duplicative corporate and property-level operating costs. The transaction is expected to be accretive to Core FFO, assuming the anticipated full cost benefits, before the positive incremental impacts of merger-related purchase accounting adjustments, and after potential dispositions. Regency will update its guidance more completely when it reports first quarter 2017 results.
J.P. Morgan Securities LLC acted as financial advisor, and Wachtell, Lipton, Rosen & Katz acted as legal advisor, to Regency in connection with the merger. Barclays Capital Inc. acted as lead financial advisor, Citigroup Global Markets Inc. acted as co-financial advisor, and Kirkland & Ellis LLP acted as legal advisor to Equity One in connection with the merger. ICR, LLC served as communications advisor for the transaction.
About Regency Centers Corporation
Regency is the preeminent national owner, operator and developer of neighborhood and community shopping centers which are primarily anchored by productive grocers and located in affluent and infill trade areas in the country’s most attractive metro areas. As of December 31, 2016, Regency’s portfolio of 307 retail properties encompassed over 42.2 million square feet, which includes properties held in co-investment partnerships. Regency has developed 225 shopping centers since 2000, representing an investment at completion of more than $3.5 billion. Operating as a fully integrated real estate company, Regency is a qualified real estate investment trust that is self-administered and self-managed.
About Equity One, Inc.
As of December 31, 2016, Equity One’s portfolio comprised 122 properties, including 101 retail properties and five non-retail properties totaling approximately 12.8 million square feet of gross leasable area, or GLA, 10 development or redevelopment properties with approximately 2.3 million square feet of GLA, and six land parcels. As of December 31, 2016, Equity One’s retail occupancy excluding developments and redevelopments was 95.8% and included national, regional and local tenants. Additionally, Equity One had joint venture interests in six retail properties and two office buildings totaling approximately 1.4 million square feet of GLA.
Cautionary Statement Regarding Forward-Looking Information
The information presented herein may contain forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 giving Regency’s or Equity One’s expectations or predictions of future financial or business performance or conditions. Forward-looking statements are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “target,” “estimate,” “continue,” “positions,” “prospects” or “potential,” by future conditional verbs such as “will,” “would,” “should,” “could” or “may”, or by variations of such words or by similar expressions. These forward-looking statements are subject to numerous assumptions, risks and uncertainties which change over time. Forward-looking statements speak only as of the date they are made and we assume no duty to update forward-looking statements. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
In addition to factors previously disclosed in Regency’s and Equity One’s reports filed with the Securities and Exchange Commission and those identified elsewhere in this communication, the following factors, among others, could cause actual results to differ materially from forward-looking statements and historical performance: the outcome of any legal proceedings that are or may be instituted against Regency or Equity One; the possibility that the anticipated benefits of the transaction are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of changes in the economy and competitive factors in the areas where Regency and Equity One do business; diversion of management’s attention from ongoing business operations and opportunities; potential adverse reactions or changes to business or employee relationships, including those resulting from the completion of the transaction; Regency’s ability to complete the integration of Equity One successfully or fully realize cost savings and other benefits and other consequences associated with mergers, acquisitions and divestitures; changes in asset quality and credit risk; the potential liability for a failure to meet regulatory requirements, including the maintenance of REIT status; material changes in the dividend rates on securities or the ability to pay dividends on common shares or other securities; potential changes to tax legislation; changes in demand for developed properties; adverse changes in financial condition of joint venture partner(s) or major tenants; risks associated with the acquisition, development, expansion, leasing and management of properties; risks associated with the geographic concentration of Regency; risks associated with the concentration of tenants; the impact of the transactions on relationships, including with tenants, employees, customers and competitors; significant costs related to uninsured losses, condemnation, or environmental issues; the ability to retain key personnel; and changes in local, national and international financial market, insurance rates and interest rates. Regency does not intend, and undertakes no obligation, to update any forward-looking statement.
Contact Information
Regency Investor Contacts
Michael Mas and Laura Clark
MichaelMas@regencycenters.com, 904-598-7470
LauraClark@regencycenters.com, 904-598-7831