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SEC Filings

PREM14A
FOREST CITY REALTY TRUST, INC. filed this Form PREM14A on 09/21/2018
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Table of Contents

Illustrative 52-Week High/Low Trading Prices

Lazard reviewed the range of trading prices of shares of common stock for the 52 weeks ended on June 27, 2018. Lazard observed that, during such period, the closing share price of common stock ranged from $19.24 per share to $26.30 per share, as compared to the total consideration of $25.35 per share to be paid to holders of common stock (other than Parent and its affiliates) pursuant to the merger agreement.

Illustrative Premium/Discount to Net Asset Value Analysis

Lazard reviewed selected net asset value per share of common stock based on published, publicly available Wall Street equity research reports, which indicated a median net asset value per share of $29.25. Lazard applied a discount to such median net asset value per share selected by Lazard in its professional judgment by reference to the observed weighted average of the median discount to net asset value per share relative to the trading price of the select comparable companies described under “—Illustrative Comparable Companies Public Trading Analysis” above. From this analysis, Lazard estimated an implied price per share range for shares of common stock of $22.19 per share to $28.04 per share, as compared to the total consideration of $25.35 per share to be paid to holders of common stock (other than Parent and its affiliates) pursuant to the merger agreement.

Illustrative Premiums Paid Analysis

Lazard performed an illustrative premiums paid analysis based on the premiums paid, where applicable, in selected transactions involving a U.S. acquirer and a U.S. REIT target with a transaction value greater than $1.0 billion and at least 70% of the total consideration consisted of cash consideration announced in the five years prior to July 27, 2018. Lazard calculated the 25th percentile, median and 75th percentile premia by comparing, to the extent publicly available, the per share acquisition price to the relevant target company’s closing share price on the date prior to the announcement of the transaction, or other relevant date as referenced in public filings for the respective transaction, referred to as the “undisturbed date.”

 

     Premia to
Share Price on
Undisturbed Date
 

75th Percentile

     23.8

Median

     17.1

25th Percentile

     12.7

Using a 12.7% to 23.8% premia range based on the 25th percentile and 75th percentile one-day premia paid in the transactions referenced above and the Company closing price per share as of June 15, 2018, the last trading day prior to a report that Brookfield was engaging in discussions to acquire the Company, Lazard estimated an implied price per share range for shares of common stock of $22.57 to $24.80, as compared to the total consideration of $25.35 per share to be paid to holders of common stock (other than Parent and its affiliates) pursuant to the merger agreement.

Illustrative Present Value of Future Stock Price

Lazard performed an analysis of the implied present value of the future value per share of common stock. Lazard first derived a range of theoretical future values per share for common stock as of December 31, 2018, 2019, 2020 and 2021, by applying price to FFO multiples ranging from 12.7x to 16.7x to the estimates of the Company’s OFFO for each year ending December 31, 2018, 2019, 2020 and 2021, respectively, reflected in the final business case projections. Lazard’s selection of the range of FFO multiples applied to the Company is described under “—Illustrative Comparable Companies Public Trading Analysis” above. By applying a discount rate of 10.5%, reflecting the mid-point of the estimate of the Company’s cost of equity (as described above), Lazard discounted to present value, as of June 30, 2018, both the theoretical future values per share it derived for each year ending December 31, 2018, 2019, 2020 and 2021 and the estimated dividends to be paid per share of

 

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