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

reviewed the duties of the directors in the context of the possible transaction. Representatives of Lazard and Goldman Sachs reviewed with our Board the terms and conditions of the March 7 proposal and related preliminary financial analyses. The initial transaction committee then unanimously conveyed its recommendation against accepting the March 7 proposal. After discussion and deliberation, our Board unanimously accepted the recommendation of the initial transaction committee and declined the March 7 proposal. Our Board then authorized representatives of Lazard and Goldman Sachs to inform Brookfield that our Board would be supportive of a fully financed transaction to acquire us for $25.50 per share in cash and that was not subject to the March 7 Conditions. Representatives of Lazard and Goldman Sachs conveyed this counter-proposal later that day to representatives of Brookfield.

On March 13, 2018, Brookfield provided a revised proposal to representatives of Lazard (the “March 13 proposal”), which contemplated a fully financed, binding proposal to acquire us for $25.00 per share in cash (rather than $24.50 per share in cash as provided in the March 7 proposal), but retained the March 7 Conditions, although representatives of Brookfield indicated a willingness to review the number of third party consent rights that might be triggered by the closing of the merger in order to reach consensus about the relevant consents to the merger, to develop a more complete understanding of the means and prospects for obtaining such consents on a timely basis and to agree upon the allocation of risk associated with obtaining such consents. Between March 13, 2018 and March 16, 2018, members of our senior management, representatives of Brookfield, representatives of Lazard, Goldman Sachs and Moelis, and representatives of Sullivan & Cromwell and Skadden held a series of calls to discuss and review third party consents that may be implicated by the proposed merger. After such discussions, on March 16, 2018, a representative of Brookfield communicated to representatives of Lazard and Goldman Sachs that Brookfield continued to require that we obtain certain of these third party consents in connection with the merger as a condition precedent to the Brookfield Parties’ obligation to close the merger.

On March 17, 2018, our Board convened a meeting, together with members of our senior management and representatives of Lazard, Goldman Sachs and Sullivan & Cromwell. Representatives of Lazard and Goldman Sachs reviewed with our Board the terms and conditions of the March 13 proposal and related preliminary financial analyses. Representatives of Sullivan & Cromwell reviewed with our Board the discussions that took place between March 13, 2018 and March 16, 2018. After discussion and deliberation, our Board unanimously determined not to accept the March 13 proposal because our Board believed that stockholder value would be better enhanced on a standalone basis, particularly considering that the conditionality requirements contemplated by the March 13 proposal created significant uncertainty around a potential transaction. After discussion and deliberation, our Board also directed representatives of Lazard and Sullivan & Cromwell to pursue a settlement (the “settlement”) with Starboard, Scopia and RMS that would include the reconstitution of our Board. Our Board concluded that a proxy contest to replace a majority of our Board would be to the detriment of the Company and our stockholders as it would involve significant expense and significantly distract management’s time and attention at a time when it was important for our management to develop an ongoing long-term operating plan in light of the unsuccessful strategic process. After consultation with representatives of Lazard and Goldman Sachs regarding the composition of our stockholder base, past campaigns by Starboard and Scopia, Starboard’s record of success in past campaigns and our corporate governance profile including the tenure of certain of our independent directors at this time and the fact that five of our 13 directors were not independent under NYSE listing standards at this time, our Board came to a consensus that it would be difficult to succeed in such a proxy contest. Accordingly, our Board was supportive of a settlement that would involve the refreshment of a majority of our Board with other customary terms for a settlement of this type. The scope of our engagements with Lazard and Sullivan & Cromwell was contemporaneously expanded to include activism advisory assistance in connection with the negotiation of the settlement.

Between March 19, 2018 and March 22, 2018, as directed by our Board, representatives of Sullivan & Cromwell, in consultation with representatives of Lazard, negotiated the terms of the settlement with legal counsel to each of Starboard, Scopia and RMS. On March 21, 2018, we announced that our Board had extended the Nomination Window from 5:00 p.m., Eastern Time, on March 21, 2018 to 5:00 p.m., Eastern Time, on March 28, 2018. Our Board concluded that the submission of a notice during the Nomination Window could prevent the timely

 

-47-