Prime Retail to Purchase Horizon Group

Prime Retail Inc. said it agreed to buy Horizon Group Inc. for $906.3 million in stock and assumed debt, making it the largest owner and operator of factory outlet retail centers in the United States. The purchase would boost Baltimore-based Prime Retail’s portfolio by more than 80% to 43 properties with a total of 11.8 million square feet in 25 states. That’s double its closest competitor, FAC Realty Trust Inc. Horizon plans to spin off to shareholders before the sale is completed the worst-performing 17 of its 37 centers. Under terms of the agreement, Norton Shores, Mich.-based Horizon shareholders would swap each of their shares for 0.2 of a Prime Retail Series B preferred share and 0.597 share of its common stock. Prime Retail would also assume $540.4 million of debt. Horizon’s shares fell 56 cents to close at $12 on the New York Stock Exchange. Prime Retail rose 88 cents to close at $14.19, also on the NYSE.