SEC Form SC 13D/A filed by Urstadt Biddle Properties Inc. (Amendment)

Merger Agreement

On May 17, 2023, the Issuer entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Issuer, Regency Centers Corporation, a Florida corporation (“Regency”), Hercules Merger Sub, LLC, a Maryland limited liability company and a wholly owned subsidiary of Regency (“Merger Sub”), UB Maryland I, Inc., a Maryland corporation and a direct wholly owned subsidiary of the Issuer (“Hermes Sub I”), and UB Maryland II, Inc., a Maryland corporation and a direct wholly-owned subsidiary of Hermes Sub I (“Hermes Sub II”), pursuant to which, in accordance with the terms, and subject to the conditions, set forth therein, (a) Hermes Sub II will be merged with and into the Issuer (the “First Merger”), with the Issuer surviving the First Merger as a wholly owned subsidiary of Hermes Sub I, and (b) following the First Merger, Hermes Sub I will be merged with and into Merger Sub (the “Second Merger” and together with the First Merger, the “Mergers”), with Merger Sub being the surviving entity in the Second Merger.

On the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the First Merger (the “First Merger Effective Time”), each share of the Issuer’s Common Stock and Class A Common Stock (the Class A Common Stock and, together with the Common Stock, the “Issuer Common Shares”), 6.25% Series H Cumulative Redeemable Preferred Stock and 5.875% Series K Cumulative Redeemable Preferred Stock will be converted into one equivalent share in Hermes Sub I, with respect to each class, subject to limited exceptions set forth in the Merger Agreement. Immediately thereafter, at the effective time of the Second Merger (the “Second Merger Effective Time”), each share of Hermes Sub I’s common stock, par value $0.01 per share, and class A common stock, par value $0.01 per share, will be converted into 0.347 (the “Exchange Ratio”) of a share of common stock, par value $0.01 per share, of Regency (“Regency Common Stock”), without interest and subject to certain adjustments (“Merger Consideration”), subject to limited exceptions set forth in the Merger Agreement, and each share of Hermes Sub I’s 6.25% Series H Cumulative Redeemable Preferred Stock and 5.875% Series K Cumulative Redeemable Preferred Stock will be converted into one share of newly issued Regency 6.25% Series A Cumulative Redeemable Preferred Stock (“Regency Series A Preferred Stock”) and 5.875% Series B Cumulative Redeemable Preferred Stock (“Regency Series B Preferred Stock”), respectively having materially the same terms as the Issuer's corresponding series of preferred stock. The Merger Agreement also provides that each share of the Issuer’s restricted Common Stock will be converted into an equivalent share of restricted Hermes Sub I common stock at the First Merger Effective Time and will fully vest and convert into the right to receive the Merger Consideration at the Second Merger Effective Time.

The consummation of the Mergers is subject to various conditions, including, among others, customary conditions relating to: (a) the approval of the Mergers and the other transactions contemplated by the Merger Agreement by the affirmative vote of the holders of Issuer Common Shares representing a majority of all votes entitled to be cast on the matter at the meeting of the Issuer’s stockholders held for that purpose; (b) the effectiveness of a registration statement on Form S-4 to register the issuance of Regency Common Stock, Regency Series A Preferred Stock and Regency Series B Preferred Stock in connection with the Mergers; (c) no statute, rule or regulation that makes illegal the consummation of the Mergers having been enacted, issued, enforced, promulgated or enacted and remaining in effect, and no order or injunction of a court of competent jurisdiction being in effect that prohibits the consummation of the Mergers; (d) the shares of Regency Common Stock, Regency Series A Preferred Stock and Regency Series B Preferred Stock to be issued in the Second Merger have been approved for listing on Nasdaq; (e) each of the articles of amendment classifying the Regency Series A Preferred Stock and Regency Series B Preferred Stock have been filed with and accepted for record by the Florida Department of State; (f) no Company Material Adverse Effect (as defined in the Merger Agreement) having occurred since the date of the Merger Agreement; (g) no Parent Material Adverse Effect (as defined in the Merger Agreement) having occurred since the date of the Merger Agreement; and (h) the receipt of tax opinions relating to the status as a real estate investment trust of each of Regency and the Issuer and the tax-free nature of the transaction. The respective obligation of each of Regency and the Issuer to effect the Mergers is also conditioned on the accuracy of the other’s representations and warranties (subject to certain materiality exceptions) and the other’s performance and compliance with, in all material respects, the agreements, obligations and covenants required to be performed by it under the Merger Agreement at or prior to closing of the Mergers.

The Merger Agreement also contains customary representations, warranties and covenants of the Issuer, Hermes Sub I, Hermes Sub II, Regency and Merger Sub for a transaction of this nature, including covenants regarding the operation of the business of both the Issuer and its subsidiaries prior to the closing of the Mergers. Regency and the Issuer have also agreed to coordinate the timing of their regular quarterly dividends prior to the closing of the Mergers. In furtherance of the foregoing, the Issuer has agreed that its next dividend declared to holders of Issuer Common Shares will have a record date of June 14, 2023, payable on July 6, 2023, and will be prorated (in an amount equal to (2.5 divided by 3) multiplied by the quarterly dividend for each class of the Issuer Common Shares) to take into account the shorter period covered from the prior Issuer record date to June 14, 2023 as compared to the Issuer’s regular quarterly dividend timing. Also, each party is permitted to declare certain REIT dividends, if necessary, subject to an adjustment to the Exchange Ratio in accordance with the Merger Agreement.

As promptly as practicable after the First Merger Effective Time, the Issuer’s Common Stock, Class A Common Stock, 6.25% Series H Cumulative Redeemable Preferred Stock and 5.875% Series K Cumulative Redeemable Preferred Stock will be delisted from the New York Stock Exchange and will be deregistered under the Securities Exchange Act of 1934, as amended.

On May 17, 2023, the Reporting Persons, in their respective capacities as record or beneficial owners of Issuer Common Shares, entered into a Voting Agreement (the “Voting Agreement”), with the Issuer and Regency, pursuant to which and on the terms and subject to the conditions thereof, among other things, the Reporting Persons have agreed to vote (or cause to be voted) all of the Issuer Common Shares owned of record or beneficially by the Reporting Persons as of the date of the Merger Agreement and any additional Issuer Common Shares of which any such Reporting Persons acquires record or beneficial ownership after the date of the Merger Agreement (collectively, the “Covered Shares”) (a) in favor of any proposal to approve the Mergers (or any similar proposal required to be approved in order for either of the Mergers to be consummated) and (b) against (i) any action or agreement that would reasonably be expected to result in any of the conditions to the Issuer’s obligations to complete the Mergers not being fulfilled or result in a breach of any covenant, representation or warranty or any other obligation or agreement of the Issuer contained in the Merger Agreement or (ii) any Company Acquisition Proposal (as defined in the Merger Agreement). The Reporting Persons have also agreed not to transfer the Covered Shares. The Voting Agreement expires on the earliest of (A) the Second Merger Effective Time, (B) when the Issuer’s board of directors, in accordance with the terms of the Merger Agreement, changes its recommendation that the Issuer’s stockholders vote to approve the Mergers and (C) such time as the Merger Agreement is terminated in accordance with the terms of the Merger Agreement.

The foregoing description of the Voting Agreement is qualified in its entirety by the full text of the Voting Agreement, which is attached hereto as Exhibit 3 and is incorporated by reference herein.

 

	URSTADT REALTY SHARES II L.P. By: URSTADT PROPERTY COMPANY, INC., Its sole general partner
	By:	/s/ Charles D. Urstadt
	Name:	Charles D. Urstadt
	Title:	Chairman of the Board and President