Behar, joining the board immediately, will fill the vacancy created when Bruce Ratner, executive chairman of Forest City's New York subsidiary, left the board at the end of 2016. As I suggested, the lack of encomia toward Ratner suggested the company was not super-pleased with the performance under Ratner. Macnab, an independent director, would succeed Stan Ross, who won't stand for re-election at Forest City's upcoming, if unscheduled, annual meeting.
Activist investor still pushing
That makes eight of 13 board members independent--enough for the main activist investor, Scopia Capital, but not so for a smaller, feistier activist investor, Land and Buildings Investment Management, which yesterday issued another blistering letter to FCRT shareholders.
"It appears to be business as usual," Land and Buildings' Jonathan Litt wrote, saying that the "announcement of the expected dual share collapse has not yet led to the real change required" to increase the value of shares. Land and Buildings suggested that the "independent" directors would be "outgunned on a 13-person Board made up of other Ratner appointees."
"Are shareholders to believe the current Board, most of whom have overseen the Company's abject underperformance due, in our view, to a tangled web of nepotism and self-dealing, can exert proper oversight over management to execute on a strategic plan that will close the valuation gap to NAV [net asset value]?" Litt wrote.
Land and Buildings requested that Forest City "immediately form a special committee of truly independent directors to fully and fairly evaluate strategic alternatives" and "ensure the Ratners or management are not improperly interfering with the process."
“Why do the board and management appear unwilling to explore all strategic options at this time, despite numerous parties likely interested in acquiring the company at a significant premium to today’s share price?” wrote Litt.
In other words, the fund sees Forest City either as a takeover candidate or, perhaps, potentially selling large pieces to others. If so, could Forest City's 30% stake in Pacific Park Brooklyn, excepting the arena and 461 Dean, be in play?