Kite Realty Group, L.P. signed definitive agreement to acquire Retail Properties of America, Inc. (NYSE:RPAI) from a group of shareholders for $2.8 billion on July 18, 2021. Under the terms of the merger agreement, each RPAI common share will be cancelled and automatically converted into the right to receive 0.623 Kite Realty Group Trust (NYSE:KRG) common shares, plus the right, if any, to receive cash in lieu of fractional Kite Realty common shares into which such shares of RPAI common stock would have been converted pursuant to the terms and subject to the conditions set forth in the merger agreement. KRG anticipates assuming all RPAI debt and has obtained a financing commitment to provide a $1.1 billion term loan bridge facility in the event certain debt consents cannot be obtained prior to the closing of the transaction. On a pro forma basis, following the closing of the transaction, KRG shareholders are expected to own approximately 40% of the combined company's equity and RPAI shareholders are expected to own approximately 60%. The combined company will retain the Kite Realty Group name and trademarks and will continue to trade under the NYSE symbol KRG. RPAI common stock will be delisted from the NYSE. RPAI will pay to KRG a termination fee of $107 million and KRG will pay to RPAI a termination fee of $70 million upon termination.

The combined company will continue to be operated at the high standards previously established at both KRG and RPAI.  Immediately following the merger, the Kite Realty Board will consist of 13 members, nine of whom will be current trustees of Kite Realty and four of whom will be current directors of RPAI. John A. Kite will remain the Chairman and Chief Executive Officer of Kite Realty. William Bindley will continue to serve as Lead Independent Trustee. The KRG management team will lead the combined company, with John Kite as Chief Executive Officer, Thomas McGowan as President and Chief Operating Officer and Heath Fear as Chief Financial Officer. The approach to integration will draw from the best practices of both companies to ensure continuity for tenants, employees, and other stakeholders. Pursuant to the terms of the merger agreement, on October 13, 2021, the Board approved an increase in the size of the Board from 10 trustees to 13 trustees, contingent and effective upon the occurrence of the Effective Time, and appointed Biumi, Grimes, Gorski, and Lynch to fill such newly created vacancies on the Board. In the event that the Merger is not consummated, such increase in the size of the Board and appointments would be void. At the Effective Time, the other nine members of the 13-person Board will be current members of the Board. The combined company's corporate headquarters will be located at Kite Realty's current corporate headquarters in Indianapolis, Indiana. The transaction is subject to customary closing conditions, including the approval of both KRG and RPAI shareholders, Form S-4 shall become effective and shares of KRG to be issued in the merger shall have been approved for listing on the NYSE, KRG shall have received the written opinion of its counsel that merger will qualify as a reorganization within the meaning of Section 368(a) of the Code, and others. The transaction was unanimously approved by the Board of Trustees of KRG and the Board of Directors of RPAI. The Kite Realty Board and RPAI Board unanimously recommend that their respective shareholders vote for the merger. The Kite Realty and RPAI special meeting of shareholders will be held on October 19, 2021. As of October 19, 2021, KRG shareholders and RPAI stockholders approved the transaction. The parties expect the transaction to close during the fourth quarter of 2021. As of October 19, 2021, the merger is expected to close on October 22, 2021.

The combined company is expected to have an equity market capitalization of approximately $4.6 billion and a total enterprise value of approximately $7.5 billion upon the closing of the transaction assuming a KRG share price of $20.83, which was the closing price on July 16, 2021. This immediately accretive transaction, paired with a strong balance sheet and significant value creation opportunities, is expected to provide a runway to increase long term value for shareholders. The transaction provides immediate accretion to earnings per share upon realizing cash expense synergies of $27 to $29 million. BofA Securities is acting as lead financial advisor and fairness opinion provider to KRG, with KeyBanc Capital Markets also acting as financial advisor to KRG. David Bonser and Paul Manca of Hogan Lovells US LLP is acting as legal advisors to KRG. Citigroup Global Markets Inc. is acting as exclusive financial advisor and fairness opinion provider and Gilbert G. Menna, Blake Liggio and Daniel Adams of Goodwin Procter LLP is acting as legal advisors to RPAI. Ben Stulberg of Jones Day acted as legal advisor to Citigroup Global Markets Inc. BofA Securities, Inc. acted as financial advisor and fairness opinion provider for Kite Realty Group, L.P. Cleary Gottlieb represented BofA Securities Inc.  Georgeson LLC acted as proxy solicitor for a fee of approximately $20,000 to Kite Realty while Innisfree M&A Inc. acted as the information agent to Retail Properties for a fee of approximately $25,000. BofA Securities, Inc. will receive a fee of $16 million for its services of which $2 million will be paid on the delivery of the fairness of opinion. Citigroup Global Markets Inc. will receive a fee of $23 million for its services, of which $2.5 million will be paid on the delivery of the fairness of opinion.

Kite Realty Group, L.P. completed the acquisition of Retail Properties of America, Inc. (NYSE:RPAI) from a group of shareholders on October 22, 2021. RPAI merged into a subsidiary of KRG, with KRG continuing as the surviving public company. The completion of the transaction follows the satisfaction of all conditions to the closing of the merger. The merger is not only expected to be immediately FFO and NAV accretive, but the combined company has additional opportunities to further increase shareholder value including optimizing NOI margins, leasing of pandemic-related vacancy, lowering the company's cost of capital, and completing select developments. KeyBanc Capital Markets Inc. served as a financial advisor for KRG. Hogan Lovells US LLP served as a legal advisor for KRG. David Bonser, Paul Manca, Cristina Arumi,Matthew Bowles, Nick Eckstein and Katheryn Lee of Hogan Lovells acted as legal advisor to Kite Realty Group.