Wheeler REIT to acquire Cedar Realty

Cedar Realty Trust Inc. agreed to merge with Wheeler Real Estate Investment Trust Inc. as part of a series of related all-cash deals signed by the company after its dual-track strategic review.

The retail real estate investment trust will sell the company and its remaining assets to Wheeler at a valuation of $291.3 million, following the sale of certain properties to third parties.

Cedar will sell a portfolio of 33 grocery-anchored shopping centers to a joint venture between a fund managed by DRA Advisors LLC and KPR Centers for $840.0 million.

The company will also sell its Revelry redevelopment project in Philadelphia for $34.0 million and is in talks to sell its Northeast Heights redevelopment project in Washington, D.C., for $46.5 million. If the sale of the redevelopment projects is not consummated before the closing of the grocery-anchored shopping center portfolio sale, the two projects will be acquired by the DRA and KPR joint venture for $80.5 million.

Cedar said it expects the aforementioned transactions to generate total net cash proceeds of more than $29.00 per share, which will be distributed to its shareholders upon completion.

The estimated net proceeds of $29.00 per share reflect a 16.6% premium to Cedar's closing share price March 2 and a 70.6% premium to its closing stock price Sept. 9, 2021, the last trading day before announcing its dual-track review of strategic options.

Upon deal closing, Cedar will be 100% owned by Wheeler, and Cedar's common stock will cease trading on the NYSE. All shares of Cedar's currently outstanding 7.25% series B preferred stock and 6.50% series C preferred stock, however, will remain outstanding shares of Cedar preferred stock and will remain listed on the NYSE under their existing tickers.

The transactions are expected to close by the end of the second quarter, subject to approval by Cedar's common shareholders and other customary conditions.

Wheeler obtained debt financing commitment of up to $130 million from KeyBank NA to fund the transaction.

BofA Securities and JLL Securities are financial advisers to Cedar, and Goodwin Procter LLP is its legal counsel. JLL is the company's real estate adviser with respect to the sale of the grocery-anchored shopping center portfolio and CBRE is its real estate adviser on the sale of the redevelopment projects.

Alston and Bird LLP and Cadwalader Wickersham and Taft LLP were legal advisers to Wheeler on the deal, while KeyBanc Capital Markets LLC was its financial adviser.