May 15, 2013 / 10:01 PM / 5 years ago

UPDATE 1-DDR to buy shopping center stake from partner Blackstone

By Ilaina Jonas

NEW YORK, May 15 (Reuters) - DDR Corp, owner of shopping centers where big-box retailers are located, said on Wednesday it had agreed to buy from Blackstone Group LP the portion of 30 centers it does not already own for $1.46 billion.

The joint venture between Blackstone Real Estate Partners VII and DDR owns 44 shopping centers. Under the deal, which is expected to close in the fourth quarter, DDR will acquire the Blackstone fund’s 95 percent equity ownership in 30 of the shopping centers. Blackstone will retain 95 percent interest in the 14 properties not being acquired, while DDR will keep its 5 percent stake, DDR said.

Some of the centers DDR will own in full include Shoppers World in Boston, Woodfield Village Green in Chicago, Fairfax Towne Center in Washington, D.C. and Riverdale Village in Minneapolis.

DDR said it intends to fund the acquisition through a combination of the assumption of $398 million in existing debt, nearly $150 million from the repayment of preferred equity and mezzanine loans previously funded by DDR and proceeds from the sale of 32 million shares and unsecured debt.

The deal gives DDR the right, under certain conditions, to issue common shares to Blackstone of up to $250 million.

Shares of DDR on Wednesday closed up 13 cents, or 0.7 percent, at $19.41. In extended trading, DDR shares fell 2.9 percent to $18.85 after the deal was announced. Citing the acquisition, DDR raised the bottom of its outlook for the 2013 range of per-share funds from operations to $1.08 to $1.11 from $1.07 to $1.11 previously.

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