Activist investor declares itself unsatisfied with Forest City changes, targets Ratners who "feed at the trough"

The challenge to Forest City Realty Trust by Land and Buildings, an activist investor hedge fund, is not over.  On Tuesday, 2/28/17, Land and Buildings--which a month earlier had posted a harsh letter challenging FCRT, provoking a partial response--issued another letter to shareholders.

From the letter:

We believe two things are crystal clear to investors following yesterday’s Forest City fourth quarter earnings results and conference call:
1. Net Asset Value (NAV) estimates should be higher, towards $31 per share, based on new Company disclosures, versus current estimates around $28 and yesterday’s closing price of $22.88; and
2. Nothing has changed at Forest City since shareholders agreed to pay off the Ratner family with ~$120 million, or a 31% premium, to give up their super voting B shares and there is no meaningful change in sight under the current leadership.

The firm said not only should new independent directors be added, but "the Ratners should get their hands out of the cookie jar. By our last count at least ten Ratners remain on the payroll and continue to feed at the Company trough in addition to the Company providing tax protections for Bruce Ratner."

Land and Buildings said Forest City's board "should fully explore distributing proceeds from the $2.2 billion retail assets sales to shareholders," utilizing tax efficient strategies we have communicated to the Board.

A day later, Forest City did declare an increased quarterly dividend, from 6 cents to 9 cents. (It had suspended its dividend in December 2008 and announced resumption in February 2016.)

Forest City has not yet formally responded to the recent Land and Buildings letter, as it had to the previous one. Perhaps it considers the dividend increase a sufficient message to shareholders that things are looking up. The stock price has ticked up since the Land and Buildings letter, to $23.19.