Equity One Agrees to Acquire Capital & Counties

Chandrasekhar Atreya
24 May, 2010
New York City

North Miami-based investment trust, Equity One has agreed to acquire Capital & Counties, the US unit of Capital Shopping Centers Group Plc through a $600 million joint venture transaction.

[R]North Miami-based investment trust, Equity One has agreed to acquire Capital & Counties, the US unit of Capital Shopping Centers Group Plc through a $600 million joint venture transaction.[/R]

Real estate investment trust Equity One Inc. said that it has agreed to acquire Capital & Counties USA Inc., the US unit of UK’s largest mall owner Capital Shopping Centers Group Plc, through a $600 million joint venture transaction.

The transaction, expected to close late in the third quarter of 2010, enables Equity One to enter the California market, in line with the company''s strategic plan.

Under the deal, Capital Shopping Centers will receive 4.1 million shares of Equity One common stock and 10.9 million joint venture units. CSC may redeem its units in the joint venture for Equity One common stock on a 1-for-1 basis or cash, at Equity One''s option.

Equity One will assume about $330 million of mortgage debt, including its proportionate share of debt held by its joint ventures, with a weighted average interest rate of 5.7%.

Upon completion of the transaction, Northern California will be Equity One''s second largest market after South Florida, representing approximately 16% of its asset value.

David Fischel, the CEO of CSC, will join Equity One''s board of directors following the closing of the transaction.

Fischel said, ""This transaction allows us to focus on our core business in the United Kingdom while providing an expansion platform for Equity One. By retaining a long-term investment in Equity One, we can participate in the significant growth potential of the combined enterprise.""

Turner Newton, who has been CEO of C&C USA since 1994, will continue to lead this subsidiary for Equity One. Equity One intends to retain the majority of the in-place infrastructure, including C&C USA''s operating, acquisition and asset management teams.

Goodwin Procter acted as legal counsel to Equity One, while Eastdil Secured acted as its financial advisor. For CSC, Skadden Arps acted as its legal counsel and Bank of America Merrill Lynch acted as its financial advisor.

EQY closed Friday''s regular trading session on the NYSE at $17.22, up $0.44 or 2.62% on a volume of 0.90 million shares.

On the London stock exchange, CSCG.L closed Friday''s trading at 310.80 pence, down 2.30 pence or 0.73% on a volume of 3.94 million shares.