Note 28 - Subsequent Events

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Subsequent Events [Text Block]

28.  Subsequent Events:

RPT Merger

On August 28, 2023, the Company and RPT announced that they had entered into a definitive merger agreement (the “Merger Agreement”) pursuant to which the Company would acquire RPT through a series of mergers (collectively the “RPT Merger”). On January 2, 2024, RPT merged with and into the Company, with the Company continuing as the surviving public company. The RPT Merger added 56 open-air shopping centers, 43 of which are wholly owned and 13 of which are owned through a joint venture, comprising 13.3 million square feet of GLA, to the Company’s existing portfolio of 523 properties. In addition, pursuant to the RPT Merger, the Company obtained RPT’s 6% stake in a 49-property net lease joint venture.

Under the terms of the Merger Agreement, each RPT common share was converted into 0.6049 of a newly issued share of the Company’s common stock, together with cash in lieu of fractional shares and each 7.25% Series D Cumulative Convertible Perpetual Preferred Share of RPT was converted into the right to receive one depositary share representing one one-thousandth of a share of Class N Preferred Stock of the Company having the rights, preferences and privileges substantially as set forth in the Merger Agreement, in each case, without interest, and subject to any withholding required under applicable law, upon the terms and subject to the conditions set forth in the Merger Agreement.

The provisional fair market value of the acquired properties will be based upon a valuation prepared by the Company with assistance of a third-party valuation specialist. The Company has engaged a valuation specialist and is in the process of preparing the valuation, including determining the inputs to be used by the third-party specialist in accordance with management’s policy. Therefore, the total consideration, including the purchase price and its allocation, are not yet complete as of this filing. Once the total consideration and purchase price and allocation are determined, any excess purchase price, which could differ materially, may result in the recognition of goodwill, the amount of which may be significant.

The number of RPT shares/units outstanding as of January 2, 2024, converted to shares of the Company’s shares/units were determined as follows (amounts presented in thousands, except per share data):

	Common Shares (1)		OP Units (2)		Cumulative Convertible Perpetual Preferred Shares (3)
RPT shares/units outstanding as of January 2, 2024		87,675		1,576		1,849
Exchange ratio		0.6049		0.6049		1.0000
Kimco shares/units issued		53,034		953		1,849
Value of Kimco stock per share/unit	$	22.0005	$	22.0005	$	57.13
Equity consideration given from Kimco shares/units issued	$	1,166,775	$	20,975	$	105,607

(1)	The Company paid cash in lieu of issuing fractional Kimco common shares, which is included in “Cash Consideration” caption in the table below.
(2)	Upon consummation of the RPT Merger, the Parent Company owns 99.86% of the outstanding OP Units in Kimco OP, which is no longer a disregarded entity for federal income tax purposes.
(3)	The Company issued 1,849 shares of Class N Preferred Stock with a par value of $1.00 per share, represented by 1,848,539 depositary shares. The liquidation preference is $92.4 million ($50.00 per depositary share) and the shareholders are entitled to fixed annual dividends of $3.625 per depositary share.  The Class N Preferred Stock depositary shares are convertible at any time by the holders to 2.3071 of the Company’s common shares or under certain circumstances by the Company’s election.

The following table presents the total value of stock consideration paid by Kimco at the close of the RPT Merger (in thousands):

	Calculated Value of RPT Consideration		Cash Consideration*		Total Value of Consideration
As of January 2, 2024	$	1,293,357	$	148,881	$	1,442,238

* Amount includes $130.0 million to pay off the outstanding balance on RPT’s credit facility at closing, additional consideration of approximately $18.9 million relating to transaction costs incurred by RPT and $0.1 million of cash paid in lieu of issuing fractional Kimco common shares.

In connection with the RPT Merger, the Company assumed $511.5 million of senior unsecured notes with maturities ranging from 2026 to 2031, which bore interest at rates ranging from 3.64% to 4.74%. The RPT Merger triggered a change in control and as such, in January 2024, the Company repaid these notes, including any accrued interest.

In addition, in connection with the RPT Merger, the Company assumed and amended $310.0 million of unsecured term loans, which were outstanding under RPT's Sixth Amended and Restated Credit Agreement ("RPT Credit Facility"). The term loans consist of the following tranches: (i) $50.0 million maturing in 2026, (ii) $100.0 million maturing in 2027, (iii) $50.0 million maturing in 2027 and (iv) $110.0 million maturing in 2028. The Company entered into a Seventh Amended and Restated Credit Agreement, through which the current term loans were terminated and new term loans were issued to replace the current loans. The new term loans retained the amounts and maturities of the current term loans, however the rates (Adjusted Term SOFR plus 0.905%) and covenants were revised to match those within the Company's Credit Facility. The rates fluctuate in accordance with changes in Kimco’s senior debt ratings. The Company entered into swap rate agreements with various lenders swapping the interest rates to fixed rates ranging from 4.674% to 4.875%.

Amended and Restated Limited Liability Company Agreement

On January 2, 2024, the Parent Company, as managing member of Kimco OP, entered into an amended and restated limited liability company agreement of Kimco OP (the “Amended and Restated Limited Liability Company Agreement”), providing for, among other things, the creation of Class N Preferred Units of Kimco OP, having the preferences, rights and limitations set forth therein, and certain modifications to the provisions regarding LTIP Units (as defined in the Amended and Restated Limited Liability Company Agreement), including provisions governing distribution and tax allocation requirements and the procedures for converting LTIP Units.

Notes Payable

On January 2, 2024, the Company entered into a new $200.0 million unsecured term loan credit facility pursuant to a credit agreement, among the Company, TD Bank, N.A., as administrative agent and the other parties thereto. This unsecured term loan accrues interest at a spread (currently 0.850%) to the Adjusted Term SOFR Rate (as defined in the credit agreement) or, at the Company’s option, a spread (currently 0.000%) to a base rate defined in the credit agreement, that in each case fluctuates in accordance with changes in the Company’s senior debt ratings. The covenants are similar to those in the Company’s Credit Facility, see Footnote 12 of the Notes to Consolidated Financial Statements.

In addition, in January 2024, the Company paid off the remaining $246.2 million of its 4.45% senior unsecured notes, which were scheduled to mature in January 2024.

Albertsons Companies, Inc.

In February 2024, the Company sold its remaining 14.2 million shares of ACI held by the Company, generating net proceeds of $299.1 million. For tax purposes, the Company will recognize a long-term capital gain of $288.7 million during the three months ended March 31, 2024. The Company anticipates retaining the proceeds from this stock sale for general corporate purposes and will incur estimated corporate taxes of $72.9 million on the taxable gain.

Common Stock and Preferred

During January 2024, the Company’s Board of Directors approved the extension of the Company’s common stock share repurchase program through February 28, 2026.  In addition, the Company’s Board of Directors authorized the repurchase of up to 891,000 depositary shares of Class L preferred stock, 1,047,000 depositary shares of Class M preferred stock, and 185,000 depositary shares of Class N preferred stock through February 28, 2026.