Ratner urges shareholders to vote against acquisition

ED CARROLL | STAFF REPORTER

ecarroll@cjn.org | @EdCarrollCJN

Forest City Realty Trust co-chairman emeritus and former CEO Albert Ratner wrote an open letter to Forest City shareholders announcing his intention to vote all of the company shares he controls against Forest City’s pending acquisition by Brookfield Property Partners, according to an Oct. 25 news release. In the letter, Ratner urged his fellow shareholders to vote to reject the acquisition at a special meeting scheduled for Nov. 15.

“Forest City shareholders have only one question to decide: is it better to accept an effective $24.99 price per share from Brookfield now, or maintain the ability to potentially receive an estimated $46.03 per share (minus potential transaction costs) on an undiscounted basis – which is 84 (percent) more than the $24.99 effective price – over the coming roughly 26 months?” Ratner wrote in his letter.

Ratner also wrote that “it defies reason that the six new members of the board agreed to such a hasty, significantly undervalued transaction” and cited Forest City’s “high quality portfolio” of assets and a low recourse debt, among other reasons for why he feels the stock is undervalued.

“My review of the proxy statement and other publicly-available information disclosed by Forest City leads to the clear conclusion that the split board agreed to the pending acquisition at the wrong price, at the wrong time, through a flawed process; and that Forest City’s high quality structure means that the $70 million that the split board agreed that the company pay Brookfield if shareholders reject the acquisition could, in effect, be a bargain investment that can yield an enormous return for Forest City shareholders in both the near-term and long-term by enabling the company to pursue strategic alternatives that can generate far greater value than that provided by the Brookfield transaction,” Ratner wrote. Ratner’s announcement relates only to the shares he and his wife control; his letter does not intend to speak for the intentions of other members of the Ratner family, according to the news release.

When contacted by the Cleveland Jewish News for comment, Ratner referred the request to Saratoga Proxy Consulting, an information agent engaged by Ratner for shareholders with questions about the transactions. Joe Mills, partner at Saratoga Proxy Consulting, said Ratner had been opposed to the transaction for some time but became public about it with this letter. He said the Nov. 15 vote requires a majority of outstanding shares to vote in favor of the deal.

“The math is very compelling here and we expect the shareholders to feel the same way,” Mills said.