Ashner is CEO of Winthrop Realty Trust. Steven Witkoff is CEO of The Witkoff Group, a privately held, global real estate development and investment firm in New York City.

“If the Board insists on pursuing the current path, we will explore all of our options, with an appropriate sense of urgency, to protect the best interests of all stockholders.”

Ashner threatened to propose a slate of directors to replace the current board, who would explore all the possibilities for an exit strategy, including a sale for cash, a sale for a mix of cash and “known existing publicly traded securities” -- JBG Cos. is a closely-held private company -- or even an orderly liquidation of New York REIT's assets.

WW Investors LLC is calling on the rest of the shareholders to reject the proposed transaction “and put an end to this ongoing lunacy,” as Ashner called it.

He also said that WW Investors LLC would not, nor would any proposed board nominee, seek to acquire New York REIT or any of its assets.

“Our only intention is to compel New York REIT to conduct a strategic review process that leads to a transaction which reflects [its] true intrinsic value.”

A Public REIT In Which JBG Is A Majority Owner

The proposed acquisition was announced last month by both companies. The combined entity would be a public REIT called JBG Realty Trust, with JBG owning 65.2% of the company, according to the initial terms.

The combined company would be headquartered where JBG is based -- Chevy Chase, MD -- and there would be a regional office in New York City. The portfolio would total some 9.7 million square feet of office assets, one-million-square feet of retail assets, and 4,500 residential units.

JBG is contributing the majority of the properties to the trust with 78% of the portfolio to be located in the Washington DC area, with the remaining 22% in New York City.

Not Enough Transparency

WW Investors LLC's discomfort is not surprising. After the deal was announced, some REIT analysts noted there was not enough transparency around the valuation.

Sheila McGrath, an Evercore ISI analyst, wrote in a client note, that “….New York REIT's board owes its shareholders a lot more transparency quantitatively why this transaction is better than all viable alternatives in the short, medium and long term.”

Shareholders need to know how they are “being compensated over and above the net asset value for its public shell,” she wrote.

Separately, SunTrust Robinson Humphrey analyst Michael Lewis wrote that after a “very rough analysis” it appeared that there would be a material dilution in net asset value for New York REIT shareholders.

In the filing New York REIT made with the Securities and Exchange Commission about the acquisition, it said that full text of the combination agreement would be provided as an exhibit to a future filing. The lack of a full agreement makes an assessment of the proposal that much more difficult.

Calls to Ashner and JBG Cos. by GlobeSt.com were not immediately returned.

CHEVY CHASE, MD--Stakeholders in one of New York REIT's institutional shareholders, WW Investors LLC, have announced they have “numerous substantial and serious concerns” about the proposed $8.4 billion acquisition by JBG Cos. and believe it “is materially detrimental to the interests of all New York REIT stockholders.”

More bluntly, the company's objection is that it is "a lopsided transaction" with the benefits going entirely to JBG at the expense of New York REIT's current stockholders.

Blunt Talk

"We believe that the announced all-stock combination with JBG is one of the worst strategic transactions proposed to stockholders by a REIT board in recent memory, and will be extremely detrimental to NYRT stockholders' interests," said Michael L. Ashner, who owns the company jointly with Steven Witkoff, in a letter to New York REIT that was released publicly.

Ashner is CEO of Winthrop Realty Trust. Steven Witkoff is CEO of The Witkoff Group, a privately held, global real estate development and investment firm in New York City.

“If the Board insists on pursuing the current path, we will explore all of our options, with an appropriate sense of urgency, to protect the best interests of all stockholders.”

Ashner threatened to propose a slate of directors to replace the current board, who would explore all the possibilities for an exit strategy, including a sale for cash, a sale for a mix of cash and “known existing publicly traded securities” -- JBG Cos. is a closely-held private company -- or even an orderly liquidation of New York REIT's assets.

WW Investors LLC is calling on the rest of the shareholders to reject the proposed transaction “and put an end to this ongoing lunacy,” as Ashner called it.

He also said that WW Investors LLC would not, nor would any proposed board nominee, seek to acquire New York REIT or any of its assets.

“Our only intention is to compel New York REIT to conduct a strategic review process that leads to a transaction which reflects [its] true intrinsic value.”

A Public REIT In Which JBG Is A Majority Owner

The proposed acquisition was announced last month by both companies. The combined entity would be a public REIT called JBG Realty Trust, with JBG owning 65.2% of the company, according to the initial terms.

The combined company would be headquartered where JBG is based -- Chevy Chase, MD -- and there would be a regional office in New York City. The portfolio would total some 9.7 million square feet of office assets, one-million-square feet of retail assets, and 4,500 residential units.

JBG is contributing the majority of the properties to the trust with 78% of the portfolio to be located in the Washington DC area, with the remaining 22% in New York City.

Not Enough Transparency

WW Investors LLC's discomfort is not surprising. After the deal was announced, some REIT analysts noted there was not enough transparency around the valuation.

Sheila McGrath, an Evercore ISI analyst, wrote in a client note, that “….New York REIT's board owes its shareholders a lot more transparency quantitatively why this transaction is better than all viable alternatives in the short, medium and long term.”

Shareholders need to know how they are “being compensated over and above the net asset value for its public shell,” she wrote.

Separately, SunTrust Robinson Humphrey analyst Michael Lewis wrote that after a “very rough analysis” it appeared that there would be a material dilution in net asset value for New York REIT shareholders.

In the filing New York REIT made with the Securities and Exchange Commission about the acquisition, it said that full text of the combination agreement would be provided as an exhibit to a future filing. The lack of a full agreement makes an assessment of the proposal that much more difficult.

Calls to Ashner and JBG Cos. by GlobeSt.com were not immediately returned.