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SEC Filings

10-Q
FOREST CITY REALTY TRUST, INC. filed this Form 10-Q on 10/30/2018
Entire Document
 

If the pending Merger is not consummated by January 30, 2019 (unless extended by mutual written consent of the parties), either of us or Parent may terminate the Merger Agreement.
We or Parent may terminate the Merger Agreement if the pending Merger has not been consummated by January 30, 2019 (unless extended by mutual written consent of the parties). We or Parent also may terminate the Merger Agreement for certain other reasons, including, among others, (i) if with respect to us, in order to enter into a superior proposal or (ii) with respect to Parent, if our Board of Directors changes its recommendation to our stockholders to approve the Merger.
The pending Merger may not be completed, which may adversely affect our business.
If the pending Merger is not completed for any reason, the trading price of our Class A common stock may decline to the extent that the market price of our Class A common stock reflects positive market assumptions that the Merger will be completed and the related benefits will be realized. We may also be subject to additional risks if the Merger is not completed, including:
the requirement in the Merger Agreement that, under certain circumstances, we pay Parent a termination fee of $261 million or an expense reimbursement amount of up to $70 million;
incurring substantial costs related to the Merger, such as legal, accounting, financial advisory and integration costs that have already been incurred or will continue to be incurred until completion of the Merger;
reputational harm due to the adverse perception of any failure to successfully complete the Merger; and
potential disruption to our business and distraction of our workforce and management team to pursue other opportunities that could be beneficial to the Company, in each case without realizing any of the benefits of having the Merger completed.
The pendency of the Merger could adversely affect our business and operations and may result in the departure of key personnel.
The pendency of the Merger could adversely affect our business and operations and may result in the departure of key personnel. In connection with the pending Merger, some of our customers may delay or defer decisions or may end their relationships with us, which could negatively affect our revenues, earnings and cash flows, regardless of whether the Merger is completed. In addition, due to operating restrictions in the Merger Agreement, the Company may be unable, during the pendency of the Merger to pursue strategic transactions, undertake significant capital projects, undertake certain significant financing transactions and otherwise pursue other actions, even if such actions would prove beneficial. Similarly, our current and prospective employees may experience uncertainty about their future roles with us following the Merger, which may materially adversely affect our ability to attract and retain key personnel during the pendency of the Merger.
The Merger Agreement contains provisions that could discourage a potential competing acquiror of the Company or could result in any competing acquisition proposal being at a lower price than it might otherwise be.
The Merger Agreement contains provisions that, subject to limited exceptions, restrict our ability to solicit, initiate, knowingly encourage or facilitate any acquisition proposal. With respect to any written, bona fide acquisition proposal that we receive, Parent generally has an opportunity to offer to modify the terms of the Merger Agreement in response to such proposal before our Board of Directors may withdraw or modify its recommendation to stockholders in response to such acquisition proposal or terminate the Merger Agreement to enter into a definitive agreement with respect to such acquisition proposal. Upon termination of the Merger Agreement under circumstances relating to an acquisition proposal, we may be required to pay a termination fee of $261 million to Parent.
These provisions could discourage a potential competing acquiror that might have an interest in acquiring all or a significant part of our business from considering or making a competing acquisition proposal, even if the potential competing acquiror was prepared to pay consideration with a higher per share cash value than that market value proposed to be received or realized in the Merger, or might cause a potential competing acquiror to propose to pay a lower price than it might otherwise have proposed to pay because of the added expense of the termination fee and expense reimbursement that may become payable in certain circumstances under the Merger Agreement.
An adverse judgment in a lawsuit challenging the Merger may prevent the Merger from becoming effective or from becoming effective within the expected timeframe.
Our stockholders may file lawsuits challenging the Merger or the other transactions contemplated by the Merger Agreement, which may name us and/or our Board of Directors as defendants. We cannot assure you as to the outcome of such lawsuits, including the amount of costs associated with defending these claims or any other liabilities that may be incurred in connection with the litigation of these claims. If plaintiffs are successful in obtaining an injunction prohibiting the parties from completing the Merger on the agreed-upon terms, such an injunction may delay the completion of the Merger in the expected timeframe, or may prevent the Merger from being completed altogether. Whether or not any plaintiff’s claim is successful, this type of litigation may result in significant costs and diverts management’s attention and resources, which could adversely affect the operation of our business.

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