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SEC Filings

FOREST CITY REALTY TRUST, INC. filed this Form DEFM14A on 10/12/2018
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our Board’s belief, following a thorough review of potential operating, strategic, financial and structural alternatives, that the merger was more favorable to our stockholders than any other alternative that was available to us, including remaining an independent public company, noting in particular that our substantial improvements in corporate governance, dividend payout, corporate structure, leverage, business focus and operating results had not been rewarded by improved equity valuation in the public markets to the extent that had been anticipated when these improvements were initiated;



the current and historical trading prices for our common stock, including the fact that the $25.35 per share in cash that a holder of common stock is entitled to receive in the merger represents a premium of approximately 26.6% when compared to our closing price per share on June 15, 2018, the last trading day prior to a report that Brookfield was engaging in discussions to acquire the Company, a premium of 26.7% when compared to our 30-day VWAP as of such date and a premium of 24.0% when compared to our 90-day VWAP as of such date;



the fact that we conducted a thorough, diligent, public process to market a potential transaction, inviting over 50 strategic and financial parties to participate in the strategic process, 19 of which executed confidentiality agreements and the fact that in the course of that process we explored various transaction structures, including partnering bidders and assessing the potential for accelerated sales of certain assets, with a view to maximizing the price participants in the strategic process would be willing to pay;



our Board’s belief, in view of the results of the strategic process and the size and diversity of our portfolio, that it was unlikely that any other party would be willing to acquire the Company at an all-cash price in excess of $25.35 per share and that an all-cash price of $25.35 per share was the maximum price that Brookfield was willing to pay;



the course of negotiations between the Company and Brookfield, which resulted in pricing that was higher than the March 7 proposal and conditions to closing that are customary for a transaction of this type;



that the as-of-March 31, 2018 NAV estimates are likely not realizable upon a liquidation or sale of the Company’s assets prior to December 31, 2020, given the significant adverse tax implications of recognizing gain on the disposition of any asset we owned prior to the Company’s conversion into a REIT in advance of the expiration of the built-in gains period, as well as other factors which may contribute to the significant uncertainty of NAV estimates described below in this section and in the section entitled “Important Information About the Financial Projections and the NAV Estimates”;



that the as-of-December 31, 2020 NAV estimates, which are future-year NAV estimates and therefore not a widely recognized valuation metric for a publicly traded REIT, were created solely to provide information to our Board as to the value that may be realizable upon a liquidation or sale of the Company’s assets following the expiration of the built-in-gains period and in view of the significant limitations related to the as-of-March 31, 2018 NAV estimates noted above, and that these three-year projected NAV estimates are subject to significant risk of not being realizable upon a future liquidation or sale of the Company or its assets, including because of the relatively high proportion of Company assets owned through joint venture structures or having other significant, difficult-to-value contractual encumbrances (such as ground leases) that could negatively impact sales prices or because of the difficulty in executing on favorable terms and timing a sale of all assets, even if sold in multi-asset packages of significant scale, and because of the various other factors that could significantly and adversely affect the Company and its assets during this multi-year period, including the factors described below in this section and in the section entitled “Important Information About the Financial Projections and the NAV Estimates”;