Retail REIT Inland Real Estate Agrees to $2.3 Billion Buyout

Inland Real Estate Corp. (NYSE: IRC), an owner of neighborhood, community and power shopping centers, said Dec. 15 that it has agreed to be purchased for approximately $2.3 billion by real estate funds managed by DRA Advisors LLC.

Upon completion of the all-cash transaction, which includes the assumption of existing debt, Inland will become a privately held REIT.

Funds managed by DRA will acquire all Inland common stock for $10.60 per share in cash, which represents a premium of approximately 6.6 percent over the stock’s closing price on Dec. 14.

Thomas D’Arcy, non-executive chairman of Inland, explained that the board focused on options available to address the long-term discount at which the REIT’s shares have been trading relative to private market valuations and other shopping center REITs.

“The board unanimously believes this all-cash offer is the best course of action to address this valuation gap and provide our stockholders with strong relative value for their investment,” he said.

Inland has roughly $3.1 billion in total assets under management. In addition to its presence in the central United States, the company expanded into the Southeast through recent acquisitions of operating shopping centers and in-process retail developments. Approximately half of the company’s properties have a grocery component.

“Over the years, our team has worked diligently to enhance the overall quality and performance of our retail portfolio,” said Mark Zalatoris, president and CEO of Inland. “We are pleased DRA recognizes the value inherent in the retail platform we have established.”

Collin Mings, analyst at Raymonf James & Associates, Inc., said the transaction should be viewed as a "positive data point for the small/mid-cap shopping center REITs." He added that continued mergers and acquisitions activity should be expected in the sector heading into 2016.