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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
  3.

Their view that the per share merger consideration, which such directors regarded as effectively $24.99 for the reason noted above, is significantly less than the as-of-December 31, 2020 NAV estimates (derived based on our management’s estimated NOI of $700 million for the 12-month period ending December 31, 2021) described in this proxy statement and the present value per share amounts derived by applying a discount rate of 9.0%, which these five directors selected because it reflected the midpoint within the discount rate range of 6.0% to 12.0% utilized by our management in preparing several alternative valuations of the as-of-December 31, 2020 NAV estimates (as described in the section entitled “—NAV EstimatesSummary and Results of NAV Valuations” beginning on page 77), to those 2020 NAV per share amounts and to management’s estimates of the dividends that would be expected to be paid to stockholders through the end of 2020 if the Company were not sold in the proposed merger, as follows:

 

2020 NAV ESTIMATE

  

Estimated NAV/Share

   Premium of Estimated
NAV/Share to the $25.35
per share in

cash that a holder
of common stock is
entitled to receive

in the merger
 

Management estimates (discounted at 9.0%)—applying cap rates obtained from a commercial real estate research information service

  

$32.84(1)

 

($38.44 undiscounted and excluding projected dividends)

     29.5

Management estimates (discounted at 9.0%)—applying an asset-by-asset cap rate analysis

  

$37.11(1)

 

($43.78 undiscounted and excluding projected dividends)

     46.4

 

  (1)

Includes projected dividends from Q3 2018 through Q4 2020 as reflected in the final business case projections.

These five directors also believed that the equity value of the Company based on the per share merger consideration, which such directors regarded as effectively $24.99 for the reason noted above, and the estimated diluted number of shares outstanding of 276.9 million as of December 31, 2020, was approximately $2.17 billion and $3.36 billion, respectively, less than the aggregate estimated present NAV-based equity values of the Company based on the estimated present value per share amounts referenced above.

See section entitled “—Important Information About the Financial Projections and the NAV Estimates” beginning on page 81.

 

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