Print Page      Close Window     

SEC Filings

PREM14A
FOREST CITY REALTY TRUST, INC. filed this Form PREM14A on 09/21/2018
Entire Document
 


Table of Contents

by the Company following the execution of a definitive agreement providing for the transaction contemplated by Sponsor A’s revised Round 2 indication.

On January 6, 2018, the initial transaction committee convened a meeting, together with members of our senior management and representatives of Lazard, Goldman Sachs and Sullivan & Cromwell. During the meeting, representatives of Lazard and Goldman Sachs updated the initial transaction committee on the status of the strategic process, discussions with representatives of Brookfield and Sponsor A and reviewed various preliminary financial analyses.

On January 7, 2018, our Board convened a meeting, together with members of our senior management and representatives of Lazard, Goldman Sachs and Sullivan & Cromwell. Representatives of Sullivan & Cromwell reviewed the duties of the directors in the context of evaluating the Round 2 indications and the potential alternative standalone operating plan. During the meeting, the initial transaction committee, together with representatives of Lazard and Goldman Sachs, updated our Board on the status of the strategic process. Representatives of Lazard and Goldman Sachs also reviewed the terms of the Round 2 indications, including that Brookfield’s Round 2 indication contemplated a fully financed acquisition of the Company for $26.00 per share in cash with customary closing conditions and was contingent on a 45-day exclusivity period in negotiations with us, and reviewed various preliminary financial analyses. In advance of the meeting, our Board was provided with customary written relationships disclosure by each of Lazard and Goldman Sachs, and no director expressed concern that such relationships would interfere with Lazard’s or Goldman Sachs’ ability to continue to provide financial advisory services to the Company. Senior management also reviewed the potential alternative standalone operating plan, which our Board did not adopt during the strategic process as described above. Representatives of Lazard also reviewed with our Board unsolicited feedback received from Starboard and Scopia as to the status of the strategic process. Representatives of Lazard also reviewed with our Board matters and considerations related to certain large stockholders, including possible reactions of large stockholders based on possible outcomes of the strategic process. After discussion and deliberation, including meetings in executive session without management or advisors present and considering the views of directors that believed our standalone plan represented the most attractive alternative, our Board approved up to a 45-day exclusive negotiating period with Brookfield to allow Brookfield to complete confirmatory diligence and negotiate definitive transaction documentation, and determined to continue its evaluation of Strategic A’s Round 2 indication. To that end, our Board directed representatives of Sullivan & Cromwell to prepare an exclusivity agreement. To facilitate our Board’s evaluation of Strategic A’s Round 2 indication, our Board directed our senior management to develop an operating model for the portion of our business that would not be spun-off pursuant to the Morris Trust transaction (the “RemainCo plan”) and that representatives of Lazard and Goldman Sachs contact representatives of Strategic A to request reverse diligence information from Strategic A. At the conclusion of this meeting, the directors were closely divided on the advisability of pursuing a sale of the Company for $26.00 per share in cash as compared to continuing to operate as a standalone public company.

By this point in the strategic process, based on discussion at the January 7, 2018 meeting of our Board, although our Board had considered several strategic, operating, financial and structural alternatives in consultation with our senior management and representatives of Lazard, Goldman Sachs and Sullivan & Cromwell, the principal potential alternatives to our standalone plan that remained under consideration were: (1) a sale of the Company to Brookfield; (2) the Morris Trust transaction; and (3) the potential alternative standalone operating plan.

Later on January 7, 2018, as directed by our Board, representatives of Lazard and Goldman Sachs contacted representatives of Strategic A to request reverse diligence information from Strategic A to facilitate our Board’s review of the merits of Strategic A’s Round 2 indication. Representatives of Strategic A declined this request.

On January 10, 2018, as directed by our Board, representatives of Lazard and Goldman Sachs transmitted to Brookfield the draft exclusivity agreement prepared by Sullivan & Cromwell. The draft exclusivity agreement contained customary terms and conditions and contemplated an exclusivity period of 30 days in negotiations with us, with an extension for an additional 15 days if, on the 30th day of the exclusivity period, Brookfield confirmed

 

-40-