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SEC Filings

DEFM14A
FOREST CITY REALTY TRUST, INC. filed this Form DEFM14A on 10/12/2018
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Table of Contents

On July 26, 2018, representatives of Weil, Gotshal & Manges LLP (“Weil Gotshal”), financing counsel to Brookfield, provided representatives of Sullivan & Cromwell with a draft debt commitment letter. The debt commitment letter was negotiated and finalized by representatives of Weil Gotshal and Sullivan & Cromwell in tandem with the negotiation and finalization of the merger agreement. The terms of the debt commitment letter are summarized in the section entitled “—Debt Commitment Letter” beginning on page 84.

On July 27, 2018, our Board convened a meeting, together with members of our senior management and representatives of Lazard, Goldman Sachs, Sullivan & Cromwell and Wachtell Lipton. Representatives of Sullivan & Cromwell and Wachtell Lipton reviewed with our Board the most recent draft merger agreement and the key open terms. Our Board provided guidance and direction on the key open terms. Representatives of Lazard and Goldman Sachs each reviewed with our Board their respective preliminary financial analyses in connection with the proposed transaction.

On July 30, 2018, our Board convened a meeting, together with members of our senior management and representatives of Lazard, Goldman Sachs, Sullivan & Cromwell, Wachtell Lipton and Venable. Representatives of Venable reviewed with the directors their duties under Maryland law, including in the context of deciding whether to approve the merger. Representatives of Sullivan & Cromwell reviewed with our Board the terms of the merger agreement. Representatives of Lazard and Goldman Sachs reviewed with our Board their respective financial analyses, and each of Lazard and Goldman Sachs orally delivered its opinion as to the fairness, from a financial point of view, of the total consideration to be received by our stockholders in the merger, as described in the sections entitled “—Opinion of Lazard” and “—Opinion of Goldman Sachs” beginning on pages 62 and 69, respectively. In advance of the meeting, our Board was provided with updated customary written relationships disclosure by each of Lazard and Goldman Sachs, and no director expressed concern that such relationships would interfere with Lazard’s or Goldman Sachs’ ability to continue to provide financial advisory services to the Company. After discussion and deliberation, our Board approved the merger and the other transactions contemplated by the merger agreement by a vote of seven to five. Each of Ms. Felman, Mr. Lande, Mr. LaRue, Mr. Molinelli, Ms. Ogilvie, Mr. Ordan and Mr. Schriesheim voted for the approval of the merger and the other transactions contemplated by the merger agreement and each of Mr. Bacon, Ms. Behar, Mr. Metz, Mr. James Ratner and Mr. Roberts voted against the approval of the merger and the other transactions contemplated by the merger agreement. During our Board’s voting on the merger, our non-executive chairman expressed his view to our Board that a sale of the Company for the financial terms provided under the merger agreement failed to maximize stockholder value in view of the discount represented by this consideration relative to our non-executive chairman’s perspective: (i) regarding the estimated NAV of the Company’s assets; (ii) that a sale process closer to the end of the built-in gains period would have resulted in substantially more value for our stockholders and (iii) that the per share merger consideration did not adequately reflect the Company’s recent positive operating results and financial soundness. Our non-executive chairman also expressed criticism of what he perceived as a lack of a highly competitive bidding environment during the strategic process and also expressed criticism regarding his perception of the fee structure of our outside financial advisors, which our non-executive chairman stated he believed motivated our outside financial advisors to advocate in favor of the merger.

Later that evening, the Company and the Brookfield Parties executed the merger agreement and executed versions of the ancillary transaction documents were exchanged concurrently.

On July 31, 2018, prior to the opening of trading on the NYSE, the execution of the merger agreement was announced in a press release jointly issued by the Company and Brookfield.

Reasons for the Merger; Views of our Directors; Recommendations of our Board

After careful consideration, our Board, by a vote of seven to five, has approved the merger and the other transactions contemplated by the merger agreement, has declared the merger and the other transactions contemplated by the merger agreement advisable and in the best interests of the Company and our stockholders

 

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