Equity One, Inc. (NASDAQ:EQY) Files An 8-K Entry into a Material Definitive Agreement
Item1.01.
| Entry into a Material Definitive Agreement. |
Agreement and Plan of Merger
On November 14, 2016, Equity One, Inc. (the Company) and
Regency Centers Corporation (Regency) entered into an
Agreement and Plan of Merger (the Merger Agreement), to
which, subject to the satisfaction or waiver of certain
conditions, the Company will merge with and into Regency, with
Regency being the surviving corporation (the Merger).
On the terms and subject to the conditions set forth in the
Merger Agreement, which has been unanimously approved by the
boards of directors of Regency and the Company, at the effective
time of the Merger (the Effective Time), each share of the
common stock, par value $0.01 per share, of the Company (the
Company Common Stock) issued and outstanding immediately
prior to the Effective Time (other than shares of Company Common
Stock owned directly by the Company or Regency and in each case
not held on behalf of third parties) will be converted into the
right to receive 0.45 (the Exchange Ratio) of a newly
issued share of the common stock of Regency (the Merger
Consideration).
In addition, at the Effective Time, (a) each option to purchase
shares of Company Common Stock (Company Stock Option),
whether vested or unvested, that is outstanding and unexercised
as of immediately prior to the Effective Time will vest in full
and be converted into the right to receive an amount in cash
equal to the excess of (i)(x)the value of a share of common stock
of Regency (Regency Common Stock) as of the last complete
trading day prior to the closing multiplied by (y)the Exchange
Ratio, over (ii) the exercise price of such Company Stock Option,
(b) each award of restricted shares of Company Common Stock that
is outstanding as of immediately prior to the Effective Time will
be assumed by Regency and will be converted into an award of
restricted shares of Regency Common Stock with respect to a
number of shares of Regency Common Stock (Regency Restricted
Stock Award) equal to the product obtained by multiplying the
number of shares of Company Common Stock subject to such
restricted stock award as of immediately prior to the Effective
Time bythe Exchange Ratio, with the Regency Restricted Stock
Awards held by David Lukes, Matthew Ostrower, and Mike Makinen,
the Companys non-employee directors, and certain other key
employees vesting in fulland (c) each long term incentive
performance award in respect of shares of Company Common Stock
(each, an LTIP Award), that is outstanding immediately
prior to the Effective Time shall vest in full (based on the
actual achievement of any applicable performance goals, and
without proration) and be converted into a number of fully vested
shares of the Regency Common Stock equal to the product obtained
by multiplying the number of shares of Company Common Stock
subject to such LTIP Award as of immediately prior to the
Effective Time by the Exchange Ratio.The Regency Restricted Stock
Awards that do not vest as of the Effective Time will continue to
have the same terms and conditions as the Company restricted
stock award to which it relates, except that in the event a
holders employment with Regency is terminated by Regency without
cause, by the holder for good reason, or due to the holders death
or disability, the Regency Restricted Stock Award will vest in
full as of the date of the applicable termination.
In the Merger Agreement, Regency has agreed to take such actions
as are necessary to cause three directors of the Company to
become members of the board of directors of Regency (the
Regency Board of Directors) immediately after the
Effective Time.
The consummation of the Merger is subject to certain closing
conditions, including (a) the approval of Company stockholders
and Regency stockholders, (b) the shares of Regency Common Stock
to be issued in the Merger will have been approved for listing on
the New York Stock Exchange, (c) the absence of any temporary
restraining order, preliminary or permanent injunction or other
order issued by any court of competent jurisdiction or other
legal restraint or prohibition preventing the consummation of the
Merger, (d) the receipt of certain legal opinions by the Company
and Regency, (e) certain representations and warranties of the
Company and of Regency being true and correct, and (f) other
conditions specified in the Merger Agreement.
The Merger Agreement provides that, during the period from the
date of the Merger Agreement until the Effective Time, each of
the Company and Regency will be subject to certain restrictions
on its ability to solicit alternative acquisition proposals from
third parties, to provide non-public information to third parties
and to engage in discussions with third parties regarding
alternative acquisition proposals, subject to customary
exceptions.
The Merger Agreement provides for certain termination rights for
both Regency and the Company.Upon termination of the Merger
Agreement under certain specified circumstances, the Company may
be required to pay Regency a termination fee of $150,000,000 and
Regency may be required to pay the Company a termination fee of
$240,000,000.In addition, if the Merger Agreement is terminated
because of a failure by the Companys stockholders to approve the
Merger, the Company will be required to reimburse Regency for
transaction expenses up to $45,000,000. If the Merger Agreement
is terminated because of a failure by Regencys stockholders to
approve the Merger, Regency will be required to reimburse the
Company for transaction expenses up to $45,000,000.
Regency and the Company each made certain representations,
warranties and covenants in the Merger Agreement, including,
among other things, covenants by Regency and the Company to
conduct their businesses in the ordinary course during the period
between the execution of the Merger Agreement and consummation of
the Merger.
On November 14, 2016, in connection with the execution of the
Merger Agreement, Regency entered into a voting agreement (the
Voting Agreement) with Gazit-Globe, Ltd. and certain of
its affiliated entities (collectively, the Gazelle
Shareholders), which collectively beneficially own
approximately 34% of the outstanding Company Common Stock. The
Voting Agreement provides, subject to the terms and conditions
thereof, for the Gazelle Shareholders to vote their shares of
Company Common Stock in favor of the transactions contemplated by
the Merger Agreement.
The foregoing summary does not purport to be a complete
description and is qualified in its entirety by reference to the
full text of the Merger Agreement, which is attached hereto as
Exhibit 2.1 and is incorporated herein by reference.
The Merger Agreement has been attached as an exhibit to this
report to provide investors and security holders with information
regarding its terms. It is not intended to provide any other
factual information about Regency or the Company or to modify or
supplement any factual disclosures about the Company in its
public reports filed with the U.S. Securities and Exchange
Commission (the SEC). The Merger Agreement includes
representations, warranties and covenants of Regency and the
Company made solely for the purposes of the Merger Agreement and
which may be subject to important qualifications and limitations
agreed to by Regency and the Company in connection with the
negotiated terms of the Merger Agreement. Moreover, some of those
representations and warranties may not be accurate or complete as
of any specified date, may be subject to a contractual standard
of materiality different from those generally applicable to the
Companys SEC filings or may have been used for purposes of
allocating risk among Regency and the Company rather than
establishing matters as facts.
Item5.02(e) |
Compensatory Arrangements of Certain Officers |
On November 14, 2016, the Company entered into amendments (the
Amendments) to the employment agreements (the
Employment Agreements) of David Lukes, Matthew Ostrower,
and Mike Makinen that provide, in each case, that (i) in addition
to other payments and benefits to which the applicable executive
may be entitled, upon a termination without cause or a
resignation for good reason, the executive will, subject to the
terms and conditions of his Employment Agreement, be entitled to
(A)a lump sum payment equal to 2.9x (or, for Mr. Makinen only,
2.0x) the sum of (x) the executives average annual bonus, if any,
for the three most recently completed calendar years plus (y) the
executives then current base salary and (B)a pro-rata portion of
the executives target annual bonus for the calendar year in which
the termination occurs; (ii) a non-renewal of the applicable
Employment Agreement will be deemed a termination without cause
entitling the executive to the severance described in clause (i)
above; and (iii) the respective employee and consultant
non-solicit covenants apply only to employees and consultants
currently employed or engaged by the Company.Except as modified
by the Amendments, the Employment Agreements will otherwise
continue in full force and effect.
Item8.01. |
OTHER ITEMS |
On November 14, 2016, the Company and Regency issued a joint
press release announcing that they had entered into the Merger
Agreement.A copy of the press release is included as Exhibit 99.1
and is incorporated herein by reference.
Additionally, on November 14, 2016 after the announcement of the
Merger, the Company provided supplemental information regarding
the proposed Merger in a communication circulated to its
employees. A copy of the employee communication is attached
hereto as Exhibit 99.2 and is incorporated herein by reference.
Item9.01. |
Financial Statements and Exhibits. |
(d) Exhibits.
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| 2.1 |
Agreement and Plan of Merger, dated as of November 14, 2016, between Regency and the Company* |
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| 99.1 | Joint Press Release, dated November 14, 2016 | |
| 99.2 | Communication to Employees |
* |
Schedules have been omitted to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally to the SEC a copy of any omitted schedule upon request by the SEC. |
Forward-Looking Statements
This communication includes forward-looking statements. Use of
the words may, will, would, could, should, believes, estimates,
projects, potential, expects, plans, seeks, intends, evaluates,
pursues, anticipates, continues, designs, impacts, affects,
forecasts, target, outlook, initiative, objective, designed,
priorities, goal, or the negative of those words or other similar
expressions is intended to identify forward-looking statements
that represent our current judgment about possible future events.
These forward-looking statements may include statements with
respect to, among other things, the proposed Merger with Regency,
including the expected timing of completion of the Merger; the
benefits of the Merger; the combined companys plans, objectives
and expectations; future financial and operating results; and
other statements that are not historical facts.
These forward-looking statements are based on numerous
assumptions (some of which may prove to be incorrect) and are
subject to risks, uncertainties and other factors that could
cause actual results and events to differ materially from those
expressed or implied by these forward-looking statements,
including the following risks, uncertainties and other factors:
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the risk that the Merger may not be completed in a timely manner or at all due to the failure to obtain the approval of the Companys or Regencys stockholders or the failure to satisfy other conditions to completion of the Merger; |
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the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement; |
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the outcome of any legal proceeding that may be instituted against the Company and others following the announcement of the Merger; |
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the amount of the costs, fees, expenses and charges related to the Merger; |
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the risk that the benefits of the Merger, including synergies, may not be fully realized or may take longer to realize than expected; |
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the risk that the Merger may not advance the combined companys business strategy; |
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the risk that the combined company may experience difficulty integrating the Companys employees or operations; |
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the potential diversion of the Companys managements attention resulting from the proposed Merger; |
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economic uncertainty or downturns in general, or in the areas where the Companys properties are located; |
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local conditions, such as an oversupply of retail space, a reduction in demand for retail space or a change in local demographics; |
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the attractiveness of the Companys properties to tenants and competition for tenants from other available space; |
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adverse changes in the financial condition of the Companys tenants and ongoing consolidation within the retail sector; |
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the adverse impact of competition from new retail platforms and concepts to the Companys existing tenants; |
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changes in the perception of retailers or shoppers regarding the safety, convenience and attractiveness of the Companys shopping centers; |
| changes in the overall climate of the retail industry; |
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the Companys ability to provide adequate management services and to maintain its properties; |
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increased operating costs, if these costs cannot be passed through to tenants; |
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the expense of periodically renovating, repairing and re-letting spaces; |
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the impact of increased energy costs on consumers and its consequential effect on the number of shopping visits to our properties; |
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the consequences of any armed conflict involving, or terrorist attack against, the United States. |
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greater than anticipated construction or operating costs or delays in completing development or redevelopment projects or obtaining necessary approvals therefor; |
| inflationary, deflationary and other general economic trends; |
| fluctuations in interest rates; |
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the loss of key employees or inability to identify and recruit new employees; |
| the outcome of pending or future litigation; |
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the adequacy of the Companys cash flows from operations to meet its ongoing cash obligations and fund its investment program; |
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the potential liability for a failure to meet regulatory requirements, including the maintenance of REIT status; |
| potential changes to tax legislation; |
| changes in demand for developed properties; |
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risks associated with the acquisition, development, expansion, leasing and management of properties; |
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the effects of losses from natural catastrophes in excess of insurance coverage; |
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the potential impact of announcement of the proposed transactions or consummation of the proposed transactions on relationships, including with tenants, employees, customers and competitors; and |
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other factors identified in the Companys and Regencys filings with the Securities and Exchange Commission. |
Actual results may differ materially from those projected in the
forward-looking statements. The Company does not undertake to
update any forward-looking statements.
Additional Information and Where to Find It
This communication relates to the proposed business combination
between the Company and Regency.The proposed combination will be
submitted to the Companys and Regencys shareholders for their
consideration and approval. In connection with the proposed
combination, the Company and Regency will prepare and file with
the SEC a registration statement on Form S-4 containing a joint
proxy statement/prospectus and other documents with respect to
the proposed Merger. This communication is not a substitute for
the registration statement, proxy statement/prospectus or other
document(s) that the Company and/or Regency may file with the SEC
in connection with the proposed transaction. INVESTORS AND
SECURITY HOLDERS OF THE COMPANY AND REGENCY ARE URGED TO READ
CAREFULLY THE REGISTRATION STATEMENT, PROXY STATEMENT/PROSPECTUS
AND OTHER DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
COMPANY, REGENCY AND THE PROPOSED TRANSACTION. Investors and
security holders may obtain free copies of these documents (when
they are available) and other related documents filed with
theSECat theSECsweb site atwww.sec.gov. Investors may also
request copies of the documents filed with the SEC by the Company
by contacting the Companys Investor Relations.Investors may also
request copies of the documents filed with the SEC by Regency by
contacting Regencys Investor Relations.
Certain Information Regarding Participants
The Company, Regency and their respective directors and executive
officers may be deemed participants in the solicitation of
proxies in connection with the proposed transaction.You can find
information about the Companys directors and executive officers
in its definitive proxy statement for the 2016 Annual Meeting of
Stockholders, which was filed with the SEC on April 1, 2016. You
can find information about Regencys directors and executive
officers in its definitive proxy statement for the 2016 Annual
Meeting of Stockholders, which was filed with the SEC on March
14, 2016. Additional information regarding the special interests
of these directors and executive officers in the proposed
transaction will be included in the registration statement, proxy
statement/prospectus or other documents filed with the SEC if any
when they become available. You may obtain these documents (when
they become available) free of charge at the SECs web site at
www.sec.gov and from Investor Relations at the Company or Regency
as described above.
No Offer or Solicitations
This document shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there
be any sale of securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any
such jurisdiction. No offering of securities shall be made except
by means of a prospectus meeting the requirements of Section 10
of the U.S. Securities Act of 1933, as amended.
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.
| Date:November 15, 2016 | Equity One, Inc. | |||
| By: |
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EXHIBIT INDEX
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| 2.1 |
Agreement and Plan of Merger, dated as of November 14, 2016, between Regency and the Company* |
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| 99.1 | Joint Press Release, dated November 14, 2016 | |
| 99.2 | Communication to Employees |
* |
Schedules have been omitted |
About Equity One, Inc. (NASDAQ:EQY)