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SEC Filings

DEFM14A
FOREST CITY REALTY TRUST, INC. filed this Form DEFM14A on 10/12/2018
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equity value of the Company at the merger consideration as proposed in the February 19 draft, but rather proposed a capped expense reimbursement, the amount of which was bracketed for discussion, if prior to the date a stockholder meeting was convened to approve the merger, an alternative acquisition proposal was publicly disclosed and was not withdrawn as of such date, and we failed to obtain stockholder approval at such stockholder meeting. With respect to dividends and distributions, the February 27 draft bracketed for further discussion the proposals set forth in the February 19 draft described above.

On March 1, 2018, consistent with our Board’s approval at the February 21, 2018 meeting, the initial transaction committee approved the extension of the Exclusivity Period to March 9, 2018. The initial transaction committee granted this extension because Brookfield had committed a significant amount of time and expenses to date as part of its confirmatory due diligence, and Brookfield had conveyed that it anticipated concluding its remaining due diligence and making a binding proposal to us by March 9, 2018.

On March 2, 2018, representatives of Skadden provided representatives of Sullivan & Cromwell with a revised draft merger agreement (the “March 2 draft”) and a draft merger support agreement that the Brookfield Parties proposed to enter into with certain Ratner family members and related entities affiliated with the Ratner family (including RMS). With respect to closing certainty, the March 2 draft: (1) did not accept the Specific Performance Proposal and instead reinserted the Pure Option Proposal, including a Reverse Termination Fee of 8% of the equity value of the Company at the merger consideration (rather than 10% as proposed in the February 27 draft); (2) reinserted the Marketing Period Proposal and (3) left bracketed the Third-Party Consents Proposal. With respect to deal protections, the March 2 draft contemplated: (1) a Company Termination Fee of 4% of the equity value of the Company at the merger consideration (rather than 3.25% as proposed in the February 27 draft), which would be payable in customary circumstances and (2) a capped expense reimbursement of up to 1% of the equity value of the Company at the merger consideration if we failed to obtain stockholder approval of the merger, but did not accept the condition that such expense reimbursement would only be available if prior to the date a stockholder meeting was convened to approve the merger, an alternative acquisition proposal was publicly disclosed and was not withdrawn as of such date (the “Expense Reimbursement Proposal”), which expense reimbursement would, if paid, reduce dollar-for-dollar the Company Termination Fee. With respect to dividends and distributions, the March 2 draft contained the same terms proposed in the February 19 draft, which are described above.

On March 3, 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 from the March 2 draft and received guidance and direction from the initial transaction committee on these key open points. Representatives of Lazard and Goldman Sachs also updated the initial transaction committee on Brookfield’s confirmatory due diligence efforts.

On March 5, 2018, representatives of Sullivan & Cromwell provided representatives of Skadden with a revised draft merger agreement (the “March 5 draft”). With respect to closing certainty, the March 5 draft: (1) did not accept the Pure Option Proposal and instead reinserted the Specific Performance Proposal; (2) accepted the Marketing Period Proposal; (3) did not accept the Third-Party Consents Proposal and (4) proposed a Reverse Termination Fee of 9% of the equity value of the Company at the merger consideration (rather than 8% as proposed in the March 2 draft), which would be payable in customary circumstances. With respect to deal protections, the March 5 draft contemplated: (1) a Company Termination Fee of 3.75% of the equity value of the Company at the merger consideration (rather than 4% as proposed in the March 2 draft), which would be payable in customary circumstances and (2) accepted the Expense Reimbursement Proposal but left bracketed the amount of the cap for further discussion. With respect to dividends and distributions, the March 5 draft did not accept the dividend and distribution terms first proposed in the February 19 draft, which are described above.

On March 7, 2018, representatives of Brookfield provided to representatives of Lazard and Goldman Sachs a proposal letter (the “March 7 proposal”). The March 7 proposal stated that Brookfield was prepared to make a

 

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