Pan Pacific Retail Properties Inc. said today it is acquiring Emeryville, Calif.-based Western Properties Trust in a $440 million stock-and-debt deal that will create the West Coast’s largest neighborhood shopping-center REIT.

The joining is expected to be complete by the end of the fourth quarter. The combined company will have a total market cap of $1.3 billion.

The transaction, already approved by both companies’ boards, will increase Pan Pacific’s holdings by 83%, from 60 neighborhood shopping centers to 110. In the San Francisco and Sacramento markets, Pan Pacific will now own 33 shopping centers.

The deal, once closed, should add to Pan Pacific’s earnings in 2001, the company said. It will increase its quarterly dividend to 45.5 cents per share from 42 cents per share, the company said.

Pan Pacific will assume $200 million in Western debt. Each Western Properties share will be exchanged for newly issued Pan Pacific shares at a fixed 0.62 exchange ratio. As a result, Pan Pacific will issue about 11.7 million common shares and units to Western’s holders.

Shares of Pan Pacific closed Monday at 20-9/16, just under a year high of 21 and up from a low of 15-1/8. Western Properties shares ended at 12-1/2, off a year high of 12-11/16 but up from a low of 9-5/16.

In early afternoon trading Tuesday, Western shares were off 25 cents to $12.25, while Pan Pacific shares were off 18.75 cents to $20.375.

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