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SEC Filings

PREM14A
FOREST CITY REALTY TRUST, INC. filed this Form PREM14A on 09/21/2018
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income-producing properties (which collectively represented approximately 70% of the Company’s projected 2018 NOI as of the end of 2017). Such market-based input was then combined with management’s NAV estimates for the balance of our assets and adjusted to reflect “encumbrances” such as ground leases and for “marketability” for those properties where we owned less than 51%. These values were further modified based on specific valuation observations received from bidders during the strategic process and then all these valuations and adjustments were compiled to prepare an NAV estimate that included our entire real estate portfolio, which we refer to as the NAV Compilation Estimates. The NAV Compilation Estimates indicated an estimated range of NAV of $27.02 per share to $30.81 per share, which was generally consistent with management’s estimates of NAV. This analysis assumed an estimated NOI for 2018 of $543.1 million (based on our management’s estimates from December 2017) and utilized a weighted average cap rate range of 5.0% to 5.5%.

Unaudited Prospective Financial Information

We do not generally, as a matter of course, make public projections as to future performance or earnings due to, among other things, the inherent difficulty of predicting financial performance for future periods and the likelihood that the underlying assumptions and estimates may not be realized.

On August 22, 2017, our senior management discussed with our Board our standalone plan developed at the direction of our Board, which included our senior management’s forecasts for the fiscal years ended December 31, 2017 through December 31, 2022 (and which are summarized below under the section entitled “—Prior Business Case Projections” and which is referred to as the “prior business case projections”) and the underlying assumptions to these forecasts. Our Board discussed the risks, challenges and strategic opportunities facing the Company in the context of reviewing the prior business case projections. Following the discussion and questions to our senior management about the assumptions on which the standalone plan was based, our Board approved the prior business case projections. The prior business case projections were provided to Lazard and Goldman Sachs to permit them to conduct preliminary financial analyses of us and, as of September 19, 2017, the prior business case projections were also included in the online data room to which participants in the strategic process were granted access upon their execution of confidentiality agreements with the Company.

In April 2018, following the reconstitution of our Board pursuant to the settlement with Starboard, Scopia and RMS, our senior management provided our Board with an updated standalone plan (the “final business case projections”) in connection with our Board’s comprehensive review of our standalone plan, our current and projected net asset value, the strategic process and Brookfield’s various indications of interest. The final business case projections included our senior management’s forecasts for the fiscal years ending December 31, 2018 through December 31, 2022 (and which are summarized below under the section entitled “—Final Business Case Projections”). At various meetings in April, May and June 2018, our senior management discussed the final business case projections with our Board, including the differences between the final business case projections and the prior business case projections, and the underlying assumptions to these forecasts. At these meetings, our Board discussed the risks, challenges and strategic opportunities facing the Company in the context of reviewing the final business case projections. On July 13, 2018, the transaction committee directed each of Lazard and Goldman Sachs to use and rely upon the final business case projections in connection with its respective financial analyses and opinion to our Board as described above under the sections entitled “—Opinion of Lazard” and “—Opinion of Goldman Sachs,” beginning on page [●] and page [●], respectively, and the transaction committee informed our Board of this direction. Consequently, neither Lazard nor Goldman Sachs relied upon the prior business case projections in connection with its respective financial analyses and opinion to our Board as described above under the sections entitled “—Opinion of Lazard” and “—Opinion of Goldman Sachs” beginning on page [●] and page [●], respectively. On July 18, 2018, we made available to Brookfield the final business case projections.

 

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