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Kimco to Buy Pan Pacific

New York-based Kimco Realty Corp. is buying Vista-based Pan Pacific Retail Properties Inc., the companies announced July 10.

The deal has a total value of about $4 billion , Pan Pacific’s outstanding debt of about $1.1 billion and about $2.9 billion in equity value. Kimco has received financing commitments up to $3 billion, which it may use to fund all or a portion of the total merger consideration.

Under the terms of the deal, Kimco will acquire all of the outstanding shares of Pan Pacific for $70 per share in cash, and may issue up to $10 per share of the total merger consideration in the form of Kimco common stock.

Pan Pacific’s portfolio totals 138 properties, covering about 22.6 million square feet. Kimco expects to target a substantial number of the properties for its strategic co-investment programs, according to the company.

“We feel very good about the quality and long-term prospects for the neighborhood shopping centers in Pan Pacific’s portfolio,” said Milton Cooper, Kimco’s chairman and chief executive officer. “This merger fits well with our strategy of owning the highest quality shopping center portfolio, growing our management business and generating solid investment returns for our partners and shareholders, while conserving our own equity capital.”

The merger has been unanimously approved by both companies’ boards of directors. The transaction is expected to close during the fourth quarter of 2006. The merger is subject to customary closing conditions, including approval by the Pan Pacific stockholders.

Kimco, a publicly traded real estate investment trust, is traded on the New York Stock Exchange under the symbol KIM. Pan Pacific, an equity real estate investment trust, is traded on the NYSE under the symbol PNP. Pan Pacific shares stood at $69.48 in midday trading July 10, while Kimco shares were trading at $37.38.

, Pat Broderick

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