A Strategic Review

New York REIT had been under pressure from activist shareholders to raise its value for several months before the JBG Cos. proposal came to light. In October 2015 the REIT tapped Eastdil Secured to assist it in evaluating its strategic options.

Little was officially heard for months until its first quarter earnings in May when New York REIT said the strategic review was still ongoing. It wouldn't be hosting a conference call for that reason, it said.

The REIT reportedly had some companies making inquiries with at least one company — SL Green Realty — said to be considering a deal, according to Bloomberg. Later, a company representative denied the report, in an account by The Real Deal.

Nevertheless, at least one company was serious enough to approach New York REIT only to be rudely ignored, according to a letter sent by activist shareholder entity WW Investors LLC in the beginning of May.

A Furious Response

When the proposed JGB merger was announced at the end of the month, WW Investors, an entity owned and controlled by Michael L. Ashner and Steven Witkoff, reacted furiously at what they perceived to be a deal approved by a biased board that grossly undervalued New York REIT's assets.

Indeed, some analysts almost immediately concluded that the proposed transaction would be a material dilution in net asset value for New York REIT shareholders.

In a letter released publicly shortly after the deal was announced, Ashner wrote that “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.”

Later, they informed New York REIT that they planned to seek the election of a slate of five directors at the upcoming 2016 annual shareholder meeting scheduled in October to replace the ones that had voted for the deal.

New York New York |

WASHINGTON, DC—The push back by New York REIT's shareholders against a proposed $8.4 billion takeover by JBG Cos. made earlier this year was heard loud and clear. This morning the companies announced they are dropping the bid.

Investors were clear in their preference for a liquidation to generate near-term cash, Matt Kelly, managing partner of JBG Cos., said in a prepared statement.

“Because we were unable to modify the transaction to the degree that would likely have gained shareholder approval, we decided it was more expedient to simply terminate the agreement rather than proceed with a shareholder vote,” he said.

New York REIT will instead sell off the individual assets in its portfolio and distribute the net proceeds to shareholders.

A Strategic Review

New York REIT had been under pressure from activist shareholders to raise its value for several months before the JBG Cos. proposal came to light. In October 2015 the REIT tapped Eastdil Secured to assist it in evaluating its strategic options.

Little was officially heard for months until its first quarter earnings in May when New York REIT said the strategic review was still ongoing. It wouldn't be hosting a conference call for that reason, it said.

The REIT reportedly had some companies making inquiries with at least one company — SL Green Realty — said to be considering a deal, according to Bloomberg. Later, a company representative denied the report, in an account by The Real Deal.

Nevertheless, at least one company was serious enough to approach New York REIT only to be rudely ignored, according to a letter sent by activist shareholder entity WW Investors LLC in the beginning of May.

A Furious Response

When the proposed JGB merger was announced at the end of the month, WW Investors, an entity owned and controlled by Michael L. Ashner and Steven Witkoff, reacted furiously at what they perceived to be a deal approved by a biased board that grossly undervalued New York REIT's assets.

Indeed, some analysts almost immediately concluded that the proposed transaction would be a material dilution in net asset value for New York REIT shareholders.

In a letter released publicly shortly after the deal was announced, Ashner wrote that “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.”

Later, they informed New York REIT that they planned to seek the election of a slate of five directors at the upcoming 2016 annual shareholder meeting scheduled in October to replace the ones that had voted for the deal.