|FOREST CITY REALTY TRUST, INC. filed this Form PREM14A on 09/21/2018|
value of the Company at the merger consideration if the Company materially breached any of its obligations under the covenant restricting the solicitation of alternative acquisition proposals (the No-Shop Termination Proposal), as described in the section entitled The Merger AgreementTermination Fee beginning on page [●].
Concurrently, representatives of Skadden provided to representatives of Sullivan & Cromwell a revised form of merger support agreement that the Brookfield Parties proposed to enter into with certain Ratner family members, entities affiliated with such family members (including RMS), Starboard and Scopia, which form of merger support agreement was provided by representatives of Sullivan & Cromwell to each of these constituencies later that day. The Ratner family and entities affiliated with the Ratner family (including RMS) did not ultimately enter into a merger support agreement with the Brookfield Parties. During this period, representatives of the Ratner family had discussions with representatives of Brookfield regarding the possibility of exchanging a portion of their common stock in connection with the merger for alternative consideration that would provide tax deferral to recipients of such alternative consideration and the willingness of the Ratner family and entities affiliated with the Ratner family (including RMS) to enter into a merger support agreement with Brookfield if there was an agreement reached on such alternative consideration. Our Board was generally aware of the existence, but not the details, of such discussions, and such discussions did not ultimately culminate in an agreement or a related merger support agreement.
Representatives of Brookfield negotiated and finalized merger support agreements with representatives of Starboard and Scopia in tandem with the negotiation and finalization of the merger agreement. The terms of the merger support agreements to which Starboard and Scopia are party are summarized in the section entitled Merger Support Agreements beginning on page [●].
On July 23, 2018, representatives of Sullivan & Cromwell reviewed with members of our senior management the open points raised by the July 20 draft and the guidance and direction received from the transaction committee with respect to the open points on July 18, 2018. Members of our senior management provided further guidance and direction on these open points.
Later on July 23, 2018, as directed by our senior management, representatives of Sullivan & Cromwell provided to representatives of Skadden a revised draft merger agreement (the July 23 draft). The July 23 draft accepted the RTF Proposal and did not accept the Third-Party Consents Proposal and the No-Shop Termination Proposal.
Between July 25, 2018, and July 30, 2018, representatives of Sullivan & Cromwell and Skadden exchanged a series of draft merger agreements and negotiated the remaining open terms, including the RTF Proposal and No-Shop Termination Proposal. Additionally, between July 27, 2018 and July 30, 2018, Messrs. LaRue and Ordan, acting as members of the transaction committee, negotiated with representatives of Brookfield regarding the remaining open terms. Ultimately, as approved by the transaction committee, the parties negotiated a compromise with respect to the Third-Party Consents Proposal, whereby if all conditions precedent to the Brookfield Parties obligation to close the merger were satisfied, the Brookfield Parties would not be obligated to close the merger until the earlier of the date that an agreed list of third party consents to the merger were obtained and December 10, 2018 (rather than the five-month anniversary of the execution of the merger agreement as contemplated in the July 20 draft). Also, as approved by the transaction committee, the parties negotiated a compromise with respect to the No-Shop Termination Proposal, whereby the Brookfield Parties would be entitled to terminate the merger agreement and to receive a Company Termination Fee if, prior to the time stockholder approval of the merger is obtained, but not after, the Company or any director committed a willful and material breach of the covenant restricting the solicitation of alternative acquisition proposals, except where such willful and material breach is the result of an isolated action by a director without knowledge of or consent by the Company prior to such action, and is not any other action by the Company, and (A) the Company takes appropriate actions to remedy such willful and material breach upon discovery thereof, and (B) the Brookfield Parties or the transactions contemplated by the merger agreement are not adversely affected in any material respect as a result thereof.