SOURCE: Developers Diversified Realty

October 03, 2005 16:04 ET

Developers Diversified Realty Announces Its Participation in a Non-Binding Proposal to Acquire ShopKo Stores, Inc.

CLEVELAND, OH -- (MARKET WIRE) -- October 3, 2005 -- Developers Diversified Realty (NYSE: DDR) announced today that it is part of a consortium of investors that has submitted a non-binding proposal contemplating an all cash acquisition of ShopKo Stores, Inc. (NYSE: SKO) for $26.50 per share. The other investors in the consortium are Sun Capital Partners Group IV, Inc., Elliott Management Corporation and Lubert-Adler Partners. ShopKo previously announced that it has entered into an agreement to be acquired for cash at a price of $25.50 per share, subject to approval by its shareholders.

Although the structure of the acquiring entity has not been firmly established, Developers Diversified anticipates its involvement would be limited to either the direct or joint venture ownership of ShopKo's real estate assets. This proposal is consistent with Developers Diversified's investment and financial strategy, including its ratings objectives.

Developers Diversified estimates that based on information found in ShopKo's public filings, its real estate assets are worth between $700 million and $900 million. The portfolio would be financed primarily with non-recourse indebtedness of up to 80% of the portfolio value. Execution of a definitive agreement is subject to due diligence, acceptance of the bid by the ShopKo board of directors and termination of the existing definitive agreement. The transaction would also be subject to ShopKo's shareholder approval.

Developers Diversified owns or manages over 500 operating and development retail properties in 44 states, plus Puerto Rico, comprising approximately 114 million square feet. Developers Diversified is a self-administered and self-managed real estate investment trust (REIT) operating as a fully integrated real estate company which develops, leases and manages shopping centers. You can learn more about Developers Diversified on the Internet at www.ddr.com.

Developers Diversified Realty Corporation considers portions of this information to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21 E of the Securities Exchange Act of 1934, both as amended, with respect to the Company's expectation for future periods. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. For this purpose, any statements contained herein that are not historical fact may be deemed to be forward-looking statements. There are a number of important factors that could cause the results of the Company to differ materially from those indicated by such forward-looking statements, including, among other factors, local conditions such as oversupply of space or a reduction in demand for real estate in the area, competition from other available space, dependence on rental income from real property, the loss of a major tenant, constructing properties or expansions that produce a desired yield on investment or inability to enter into definitive agreements with regard to our financing arrangements or our failure to satisfy conditions to the completion of these arrangements. For more details on the risk factors, please refer to the Company's Form on 10-K as of December 31, 2004.

Contact Information

  • Contact:
    Michelle M. Dawson
    Vice President - Investor Relations
    Developers Diversified Realty
    216.755.5455