Proposal Letter



 






Exhibit 10.1




August 4, 2005




VIA FACSIMILE AND 

OVERNIGHT COURIER



Board of Directors

Cedar Shopping Centers, Inc.

44 South Bayles Avenue

Port Washington, New York 11050

Attention: Leo S. Ullman



Ladies and Gentlemen:




     As you know, Equity One, Inc. (“Equity One”) is one of the largest stockholders of Cedar
Shopping Centers, Inc. (“Cedar” or the “Company”). We were extremely surprised to learn of the
Company’s new equity financing plans to sell nine million shares of common stock (the “Financing”)
disclosed in its recently issued press release. We have been a significant investor in Cedar since
last year and, as a REIT focused on supermarket anchored shopping centers, consider ourselves well
equipped to assess Cedar’s assets, operations, business plan and financing strategy.



     Unfortunately, despite the faith that we have historically placed in the management of Cedar,
we strongly believe that the Financing threatens us and all of the Company’s stockholders with
massive and unprecedented dilution. We believe that there are far more prudent methods to finance
Cedar’s pending acquisition and development plans that will better serve the interests of all
stockholders at a lower cost. We are concerned that the Financing will badly undermine the value
of the Company’s common stock and create risk to Cedar’s ability to maintain current dividend
levels. As a result, we strongly recommend that the Company terminate the Financing and seek
alternative financing options.



     We believe that, if the Financing is terminated, Cedar remains an attractive investment.
Accordingly, Equity One, based solely on publicly available information, hereby sets forth its
willingness to acquire Cedar at a price of $17.00 per common share in cash. This proposal
represents an almost 14% premium to the current trading price of Cedar’s common stock. We believe
that our proposed all-cash transaction will provide Cedar’s stockholders immediate liquidity and
the opportunity to maximize their investment in the Company. Obviously, if the Company moves
forward with the Financing, our proposal will be retracted. Moreover, we are willing to consider
other structures that may appeal to Cedar’s stockholders, including a stock and cash combination
transaction that would provide Cedar’s stockholders with the choice between immediate liquidity or
the ability to participate in the combined enterprise on a tax free



 









 




basis. We also are prepared to discuss assisting Cedar in arranging alternative financing so
that Cedar will be able to meet immediate capital needs pending completion of our proposed
transaction.




     Our proposal is conditioned upon obtaining all necessary regulatory and third party consents
and approvals, including stockholder approval, waiver of ownership restrictions and other
anti-takeover provisions in the Company’s organizational documents and Maryland law and the
execution of a mutually acceptable definitive agreement containing customary terms for a public
company transaction.



     We are confident that we have, or can easily arrange, all necessary financial resources to
finance our proposal. We are prepared to commence negotiations with you immediately.



     We believe that our proposal is an extremely attractive opportunity for Cedar’s stockholders,
and we urge the Board to seriously consider our proposal and terminate the Financing. Of course,
if Cedar proceeds with the Financing, Equity One will be required to reevaluate its available
options. We believe that Cedar’s Board has a responsibility to all of the Company’s stockholders
to consider fully and impartially any proposal that may significantly increase stockholder value.
Accordingly, we stand ready to discuss with the Board of Directors any aspect of our proposal.
Please contact me to discuss any questions you may have or if you would like further information.
You should also note that, as required by our obligations under Section 13(d) of the Securities
Exchange Act of 1934, we will be making prompt disclosure of this letter and our proposal.



     In absence of your written response to this letter by 9:00 AM on Monday, August 8, 2005, we
will consider you to have rejected this proposal.



	 	 	 	 	 
	 	Very truly yours,





EQUITY ONE, INC.

 	 
	 	By:  	/s/ Chaim Katzman
 	 
	 	 	Chaim Katzman 	 
	 	 	Chairman and Chief Executive Officer