Forest City Realty Trust (FCRT) stock jumped more than 14% yesterday, after Bloomberg reported that Forest City Realty Is Restarting Deal Talks With Brookfield, thus resuming a potential sale of the company to the giant, Toronto-based asset manager.
That suggests a reversal in strategy. FCRT in March, after its board concluded a six-month review of strategic alternatives, announced that it would remain a standalone company, albeit while replacing 9 of 13 board members, with new roles for hedge funds critical of the company, and further diminishing the role of the founding Ratner family.
(My long retrospective on Forest City Ratner/Forest City New York for The Bridge was timed to appear just before the parent company's expected decision.)
Two potential transactions before March
News coverage before that March announcement concerned two rumored transactions, one with Chicago-based Equity Commonwealth, the other with Brookfield Asset Management. A large company (Brookfield, suggested Crain's Cleveland Business) had proposed buying Forest City for $25 per share, which was close to the Forest City board's request, but the two sides could not agree on various deal conditions, according to a Forest City press release.
That price was less than what Forest City considers the aggregate value of its assets. One investment analyst suggested that Forest City would eventually be sold. Michelle Jarboe of The (Cleveland) Plain Dealer commented that it wasn't shocking that the board rejected the deal, given the contingencies and the fact that the "proposed purchase price was less than the stock's 52-week high point."
One potential transaction now
Reported Bloomberg yesterday:
That suggests a reversal in strategy. FCRT in March, after its board concluded a six-month review of strategic alternatives, announced that it would remain a standalone company, albeit while replacing 9 of 13 board members, with new roles for hedge funds critical of the company, and further diminishing the role of the founding Ratner family.
(My long retrospective on Forest City Ratner/Forest City New York for The Bridge was timed to appear just before the parent company's expected decision.)
Two potential transactions before March
News coverage before that March announcement concerned two rumored transactions, one with Chicago-based Equity Commonwealth, the other with Brookfield Asset Management. A large company (Brookfield, suggested Crain's Cleveland Business) had proposed buying Forest City for $25 per share, which was close to the Forest City board's request, but the two sides could not agree on various deal conditions, according to a Forest City press release.
That price was less than what Forest City considers the aggregate value of its assets. One investment analyst suggested that Forest City would eventually be sold. Michelle Jarboe of The (Cleveland) Plain Dealer commented that it wasn't shocking that the board rejected the deal, given the contingencies and the fact that the "proposed purchase price was less than the stock's 52-week high point."
One potential transaction now
Reported Bloomberg yesterday:
The real estate investment trust has restarted talks with Brookfield Asset Management Inc., according to people familiar with the matter. The potential price under discussion is close to the range of $25 to $25.50 per share that was being negotiated when talks fell apart in March, said the people, who asked not to be identified because the details are private.Presumably if the price is much the same, the deal conditions may have changed. FCEA stock closed yesterday at $22.92, up $2.89.
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| Screenshot from Google Finance |
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