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SEC Filings

PREM14A
FOREST CITY REALTY TRUST, INC. filed this Form PREM14A on 09/21/2018
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fully financed, binding proposal to acquire us for $24.50 per share in cash subject to: (1) our cessation of future quarterly dividend payments, (2) our procurement of consents from certain joint venture partners to a change of control prior to signing a merger agreement, (3) our procurement of consents from certain governmental entities to a change of control related to the Company’s assets and development projects as a condition precedent to the Brookfield Parties’ obligation to close the merger and (4) our completion of an internal reorganization in accordance with a plan prepared by Brookfield prior to closing to facilitate the Brookfield Parties’ debt financing plans as a condition precedent to the Brookfield Parties’ obligation to close the merger, which debt financing plans were not provided in connection with the March 7 proposal (items (1) to (4), collectively, the “March 7 Conditions”). Representatives of Skadden also provided to representatives of Sullivan & Cromwell a revised draft merger agreement (the “March 7 draft”), as well as drafts of an equity commitment letter and limited guaranty.

The terms of the March 7 draft were consistent with the March 7 proposal. In addition, with respect to closing certainty, the March 7 draft did not accept the Specific Performance Proposal and reinserted the Pure Option Proposal, including a Reverse Termination Fee of 8% of the equity value of the Company at the merger consideration, which would also be payable in other customary circumstances. With respect to deal protections, the March 7 draft: (1) accepted a Company Termination Fee of 3.75% of the equity value of the Company at the merger consideration and (2) reinserted the proposal made in the March 2 draft of a capped expense reimbursement of up to 1% of the equity value of the Company at the merger consideration if we failed to obtain stockholder approval of the merger, which expense reimbursement would, if paid, reduce dollar-for-dollar the Company Termination Fee. With respect to dividends and distributions, the March 7 draft contemplated the same dividend and distribution terms first proposed in the February 19 draft and included in the March 2 draft described above.

On March 8, 2018, the initial transaction committee convened a meeting, together with our non-executive chairman, members of our senior management and representatives of Lazard, Goldman Sachs and Sullivan & Cromwell. Representatives of Lazard and Goldman Sachs reviewed with the initial transaction committee the terms and conditions of the March 7 proposal and related preliminary financial analyses. Representatives of Sullivan & Cromwell reviewed with the initial transaction committee the key open points from the March 7 draft. After discussion and deliberation, the initial transaction committee unanimously determined that it would not recommend to our Board a transaction on the terms and pricing contemplated by the March 7 proposal, and directed representatives of Lazard and Goldman Sachs to inform Brookfield of this decision in the event Brookfield wished to revise the March 7 proposal in advance of a meeting of our Board that was to be held on March 10, 2018, which representatives of Lazard and Goldman Sachs conveyed to representatives of Brookfield later that day. Brookfield declined to revise the March 7 proposal prior the meeting of our Board on March 10, 2018. Also at this meeting, the initial transaction committee discussed the merits and considerations associated with the Company requesting that Starboard and Scopia execute confidentiality agreements to solicit their feedback with respect to the strategic process and our corporate governance. At this time, each of Starboard and Scopia was a significant stockholder of the Company and, as noted above, each had separately conveyed unsolicited feedback regarding the strategic process. After discussion and deliberation, the initial transaction committee directed representatives of Lazard and Goldman Sachs to request that each of Starboard and Scopia execute a confidentiality agreement.

Later on March 8, 2018, we executed a confidentiality agreement with Scopia and, on March 9, 2018, we executed a confidentiality agreement with Starboard. Prior to the March 10, 2018 meeting of our Board, as directed by the initial transaction committee, representatives of Lazard and Goldman Sachs solicited from each of Starboard and Scopia its feedback with respect to the strategic process and our corporate governance. During these discussions, each of Starboard and Scopia confirmed that it was considering a proxy contest to replace a majority of our Board at the 2018 annual meeting of our stockholders.

On March 10, 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

 

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