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DEFM14A
FOREST CITY REALTY TRUST, INC. filed this Form DEFM14A on 10/12/2018
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Also on September 11, 2017, as directed by our Board, representatives of Lazard and Goldman Sachs initiated outreach to strategic and financial parties to solicit their participation in the strategic process. Between the public announcement of the strategic process on September 11, 2017 and October 25, 2017, the deadline for submission of initial preliminary, non-binding indications of interest, representatives of Lazard and Goldman Sachs communicated with 44 strategic and financial parties regarding their potential participation in the strategic process; 19 of these parties, including a Brookfield special purpose entity, executed confidentiality agreements and were provided access to an online data room containing certain nonpublic information about the Company. Each of the executed confidentiality agreements included a standstill provision ranging from one year to two years in duration. Other than the standstill provisions contained in the confidentiality agreements to which each of the Brookfield special purpose entity and Sponsor D (as defined below) is a party, each standstill provision that remains in effect prohibits the counterparty from asking for a waiver of the standstill restrictions, which is commonly referred to as a “don’t ask, don’t waive” provision. Two of the 19 standstill provisions—specifically, the standstill provisions to which Strategic A and Strategic B (each as defined below) were subject—automatically terminated upon our announcement of the execution of the merger agreement. Another seven of these 19 standstill provisions, including the standstill provisions contained in the confidentiality agreements to which each of the Brookfield special purpose entity, Sponsor A (as defined below) and Sponsor D is party, permitted the counterparty to make a proposal to acquire 50% or more of our common stock within 30 days of our announcement of the execution of the merger agreement and such standstill provisions will have lapsed in accordance with their terms due to the passage of time prior to the date of the special meeting. At the time of our announcement of the execution of the merger agreement, the remaining ten participants in the strategic process were subject to a standstill provision that prohibited the counterparty from asking for a waiver of the standstill restrictions, including asking for a waiver of the standstill restrictions in order to make an acquisition proposal, and six of those standstill provisions will have lapsed in accordance with their terms due to the passage of time by the date of the special meeting. The foregoing features of the standstill provisions were reviewed with the informal steering group by representatives of Sullivan & Cromwell in advance of the execution of confidentiality agreements in connection with the strategic process and the informal steering group discussed the benefits and considerations associated with, and provided guidance to representatives of Sullivan & Cromwell with respect to negotiations regarding, the inclusion of such features in the standstill provisions.

From September 15, 2017 to October 12, 2017, a representative of Brookfield and a representative of a financial sponsor (“Sponsor A”) each made several requests that Brookfield and Sponsor A be permitted to partner with each other in connection with the strategic process. At this point, although both Brookfield and Sponsor A had been solicited to participate in the strategic process, neither Brookfield nor Sponsor A had executed a confidentiality agreement in connection with the strategic process. Following each request, our non-executive chairman and members of our senior management, in consultation with representatives of Lazard, Goldman Sachs and Sullivan & Cromwell, discussed the benefits and considerations associated with Brookfield’s and Sponsor A’s requests, including how granting or denying the bidding partnership could impact the competitive nature of the strategic process from the perspective of maximizing stockholder value, and the possibility that the bidding partnership could be permitted at a later stage of the strategic process. After discussion and deliberation over each request, including further discussion among the members of the informal steering group, our non-executive chairman and members of our senior management directed representatives of Lazard and Goldman Sachs each time to inform Brookfield and Sponsor A that we were not willing to permit the bidding partnership at that stage of the strategic process, which message was conveyed to each of Brookfield and Sponsor A each time.

On October 6, 2017, as directed by our Board, representatives of Lazard and Goldman Sachs distributed a process letter (the “Round 1 process letter”) to the parties that had executed confidentiality agreements in connection with the strategic process. The Round 1 process letter requested the submission of preliminary, non-binding indications of interest (“Round 1 indications”) by October 25, 2017. As of such date, Brookfield and Sponsor A had not executed confidentiality agreements and, as a result, neither party received the Round 1 process letter at that time.

On October 17, 2017, our Board convened a meeting, which was attended by members of our senior management and representatives of Lazard, Goldman Sachs and Sullivan & Cromwell. During this meeting, representatives of

 

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