Retail REIT Kimco Realty received a major boost following Albertsons acquisition of Rite Aid.
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Prior to the acquisition announcement, Kimco held a 9.7% stake in the grocer worth about $140M. That value jumped to $685M after shares rose 2% Tuesday, CNBC reports.
Kimco shares have struggled amid shuttering retail stores and bankruptcies as of late, with stock prices dipping approximately 15% since the beginning of the year.
“This merger underscores how we continue to benefit from our highly successful investment in Albertsons. Upon completion, we will have a clear indication of the resulting market value of our stake. Beyond the strong returns we have already generated, we will have greater flexibility and liquidity with our investment via the public markets,” Kimco CEO Conor Flynn said in a statement.
The REIT is expected to use the additional funds to reduce debt, fund future development or buy back shares under a stock repurchase program.
The Alberstons and Rite Aid deal is anticipated to close in the summer and will create a new company valued at approximately $24B. Albertsons shareholders will hold 71% of the shares of the combined company, while Rite Aid shareholders will hold the remaining 29%.
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