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SEC Filings

DEFM14A
FOREST CITY REALTY TRUST, INC. filed this Form DEFM14A on 10/12/2018
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On February 21, 2018, our Board convened a meeting, together with members of our senior management and representatives of Lazard, Goldman Sachs and Sullivan & Cromwell. During this meeting, the initial transaction committee, together with representatives of Lazard and Goldman Sachs updated our Board on the status of the strategic process and Brookfield’s confirmatory due diligence and financing efforts. In light of communications from representatives of Brookfield that Brookfield was continuing its confirmatory diligence efforts to support delivery of a firm proposal but that Brookfield did not expect to be able to deliver a firm proposal in advance of the pending conclusion of the Exclusivity Period due to the amount of confirmatory due diligence still to be completed, our Board approved the potential extension of the Exclusivity Period to no later than March 14, 2018. Also at this meeting, representatives of Sullivan & Cromwell reviewed with our Board the key open points from the February 19 draft and received guidance and direction from our Board on these key open points. Representatives of Lazard and Goldman Sachs also reviewed various preliminary financial analyses. Our Board, in consultation with our senior management and representatives of Lazard and Goldman Sachs, also discussed the market-based input regarding the selected assets provided by the nationally recognized commercial real estate services firm that was engaged by the initial transaction committee. Senior management also reviewed the potential alternative standalone operating plan. Representatives of Lazard and Goldman Sachs also reviewed unsolicited feedback from certain of our stockholders, including the possibility that certain stockholders could engage in a proxy contest to replace a majority of our Board at our 2018 annual meeting of stockholders, and that the Nomination Window was scheduled to close on February 28, 2018. After discussion and deliberation, our Board concluded that that the submission of a notice during the Nomination Window could significantly distract the time and attention of our Board and management from the strategic process and, therefore, it was in the best interests of the Company and our stockholders to extend the Nomination Window from February 28, 2018 to March 21, 2018.

During the strategic process, our Board considered with senior management and advisors the potential alternative standalone operating plan, and a consensus among a majority of our Board developed that, due to the potential risks associated with implementing and executing the potential alternative standalone operating plan, it would be in the best interests of the Company and our stockholders to consider the potential alternative standalone operating plan for adoption only after completion of the strategic process and only if the strategic process did not yield an alternative superior to our standalone plan from the perspective of maximizing stockholder value.

On February 22, 2018, we announced that, because the strategic process was ongoing, our Board had extended the Nomination Window to 5:00 p.m., Eastern Time, on March 21, 2018.

On February 24, 2018, the initial transaction committee convened a meeting, together with our non-executive chairman, members of our senior management and representatives of Lazard, Goldman Sachs and Sullivan & Cromwell. Representatives of Sullivan & Cromwell reviewed with the initial transaction committee the key open points raised by the February 19 draft and received additional guidance and direction from the initial transaction committee on these key open points, consistent with the guidance provided by our Board at its February 21, 2018 meeting.

On February 27, 2018, as directed by our Board and the initial transaction committee, representatives of Sullivan & Cromwell provided representatives of Skadden with a revised draft merger agreement (the “February 27 draft”). With respect to closing certainty, the February 27 draft: (1) did not accept the Pure Option Proposal and instead proposed that we would be able to seek specific performance of the Brookfield Parties’ obligation to close the merger in the event all conditions precedent to the Brookfield Parties’ obligation to close the merger were satisfied and the Brookfield Parties’ debt financing was available (the “Specific Performance Proposal”); (2) did not accept the Marketing Period Proposal; (3) left bracketed the Third-Party Consents Proposal and (4) proposed a Reverse Termination Fee of 10% of the equity value of the Company at the merger consideration (rather than 8% as proposed in the February 19 draft), which would be payable in customary circumstances. With respect to deal protections, the February 27 draft (1) contemplated a Company Termination Fee of 3.25% of the equity value of the Company at the merger consideration (rather than 4.5% as proposed in the February 19 draft), which would be payable in customary circumstances and (2) did not accept the termination fee of 1% of the

 

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