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SEC Filings

DEFM14A
FOREST CITY REALTY TRUST, INC. filed this Form DEFM14A on 10/12/2018
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projections. Lazard selected the range of FFO multiples applied to the Company based on Lazard’s analysis of the weighted average median FFO multiple of the select comparable companies, as adjusted based on its professional judgment and experience, and further informed by the Company’s observed historical FFO multiple trading discount to the weighted average median of the select comparable companies.

From this analysis, Lazard estimated an implied range per share of common stock and compared it to the total consideration to be paid to holders of common stock (other than Parent and its affiliates) pursuant to the merger agreement:

 

Implied Price Per Share Range

  Total Consideration  
$20.42 – $26.83   $ 25.35  

Lazard then selected and applied a range of AFFO multiples of 17.1x to 21.1x, as appropriate to the Company’s estimated AFFO for the NTM period, as set forth in the final business case projections. Lazard selected the range of AFFO multiples applied to the Company based on Lazard’s analysis of the weighted average median AFFO multiple of the select comparable companies, as adjusted based on its professional judgment and experience, and further informed by the Company’s observed historical AFFO multiple trading discount to the weighted average median of the select comparable companies.

From this analysis, Lazard estimated an implied range per share of common stock and compared it to the total consideration to be paid to holders of common stock (other than Parent and its affiliates) pursuant to the merger agreement:

 

Implied Price Per Share Range

  Total Consideration  
$19.49 – $24.06   $ 25.35  

Illustrative Dividend Discount Analysis

Lazard performed a dividend discount analysis of shares of common stock, which calculates an implied equity value per share by discounting to the present the value of the future dividends per share of common stock expected to be paid by the Company, as reflected in the final business case projections. Lazard based its dividend discount analysis on an assumed discount rate ranging from 9.5% to 11.5%, reflecting an estimate of the Company’s cost of equity, derived from a number of factors using the CAPM taking into account certain metrics, including, among others, the applicable risk free rate of return, unlevered risk profile and leverage ratio of the Company and the select comparable companies.

Lazard also calculated estimated terminal values for the Company by applying price to FFO multiples ranging from 12.7x to 16.7x to the estimates of the Company’s OFFO, reflected in the final business case projections. Lazard’s selection of the range of FFO multiples applied to the Company is described under “—Illustrative Comparable Companies Public Trading Analysis” above. From this analysis, Lazard estimated an implied range per share of common stock and compared it to the total consideration to be paid to holders of common stock (other than Parent and its affiliates) pursuant to the merger agreement:

 

Implied Price Per Share Range

  Total Consideration  
$20.55 – $27.76   $ 25.35  

Other Analyses

The analyses and data described below were presented to our Board for informational purposes only and did not provide the basis for, and were not otherwise material to, the rendering of Lazard’s opinion.

 

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