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Analysts, Shareholders Weigh in on Reckson Merger

NEW YORK CITY-One shareholder issued a letter to Reckson asking the company to reconsider the merger terms. Analysts find value in moving forward.

By Katie Hinderer | Updated on November 06, 2006

NEW YORK CITY-As the day for Reckson Associates’ shareholders to vote on the merger with SL Green approaches, analysts, shareholders and executives are weighing in on all sides. A special meeting will be held Nov. 22 at 10:30 am in New York for shareholders to cast their vote on the $6 billion merger. Two-thirds of the board must approve the transaction for it to move forward.

Last week, shareholder Arnhold and S. Bleichroeder Advisors LLC sent a letter to Reckson’s board of directors informing them that the firm will vote against the merger until the non-core assets are re-marketed. Arnhold and S. Bleichroeder owns 835,000 shares, or about 1%. “We are writing to inform you of our current intention to vote all of our eligible shares against adoption of the merger agreement with SL Green Realty Corp,” the letter stated. “We will consider lending our support to the merger only if the Board of Reckson takes the necessary steps to achieve maximum value for the portfolio.”

Arnhold and S. Bleichroeder’s main concern is that SL Green was only interested in the core assets and therefore shareholders are not getting the greatest value for their stock. SL Green plans to sell back the non-core properties to a group of Reckson investors, headed by CEO Scott Rechler for $2.1 billion. “We have concluded that these properties were inadequately marketed to potential acquirers… Accordingly we believe an open and thorough auction of these assets has the potential to deliver significantly more value to Reckson shareholders. Mack-Cali has openly expressed interest in the non-core properties.

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