Mack-Cali to Form Committee to Review Direction, Including Possible Sale

JERSEY CITY, NJ—Mack-Cali Realty Corp., which is engaged in a proxy fight with a group of dissident shareholders, reports that it intends to form a committee of independent directors to conduct a strategic review of the company that will include considering a possible sale of the REIT or some of its assets.

“Upon completion of its review, the Strategic Review Committee will make a recommendation to the full Board as to whether it is advisable to continue to execute on the company’s business plan, consider a sale of the company or any of its assets, or take other action to maximize stockholder value,” Mack-Cali states in its press announcement. “It is expected that the Strategic Review Committee will consist of four independent directors, including at least two new independent directors not currently serving on the Board.”

Mack-Cali says it intends to ask MaryAnne Gilmartin and Frederic Cumenal to join the Board immediately following the company’s Annual Meeting on June 12. Gilmartin and Cumenal were nominated, together with two others, by Bow Street Special Opportunities Fund XV, LP for election to the Board at the Annual Meeting. If Gilmartin and Cumenal accept the company’s offer to join the Board, the Board also intends to appoint at least one of them to the Strategic Review Committee, the company states.

“The initiatives announced today are the result of an ongoing, constructive dialogue between the company and its stockholders,” says William L. Mack, chairman of the Mack-Cali Board of Directors.  “Contrary to the baseless assertions made by Bow Street in the course of its self-serving campaign, the Mack-Cali Board of Directors remains open-minded and is not opposed to any action that is in the best interests of our stockholders.”

He adds, “While the Board and management team remain focused on the execution of the company’s business plan and completion of its strategic transformation, the formation of a new committee of independent directors to review the company’s strategic direction will ensure that all available opportunities for maximizing stockholder value are thoroughly considered.”

Mack-Cali and representatives of Bow Street had been engaged in settlement discussions, but on May 20 the company announced that it had broken off talks with Bow Street.

“It is unfortunate that the company has been unable to reach a constructive resolution of Bow Street’s lengthy and distracting proxy contest.  However, the initiatives announced today will allow the company to be responsive to the wishes of our stockholders without agreeing to Bow Street’s unreasonable demands, which would be detrimental to all other Mack-Cali stockholders,” says Michael J. DeMarco, CEO of Mack-Cali.

In its proxy battle, Bow Street has proposed four candidates for Board seats, that included Cumenal, who served as CEO of Tiffany & Co. from 2015 to 2017 and president from 2013 to 2015, and Gilmartin, who is co-founder and CEO of L&L MAG, a New York-based real estate development firm. Gilmartin has also served as a director of Jefferies Financial Group, an investment banking firm, since 2014.

The other two Bow Street Board candidates are Alan R. Batkin, CEO and chairman of the board of directors of Converse Associates, a strategic advisory firm, and Nori Gerardo Lietz, a senior lecturer of business administration in the Finance and Entrepreneurial Management Units at Harvard Business School. Gerardo Lietz is president of Areté Capital, a real estate advisory firm she founded in 2010.

Bow Street released a letter to shareholders today that detailed its position that highlighted what it termed as the “need for fresh perspectives and rigorous independent oversight in the Mack-Cali Boardroom to end the value destructive and weak governance practices overseen by the Mack-Cali Board of Directors.”

Bow Street in its letter to shareholders states, “This Board must be held accountable for its lack of oversight, broken promises and failed strategies.  After decades of poor returns, shareholders finally have a choice. You can vote for four new, highly-qualified independent director nominees or you can support the same four individuals who have overseen 20 years of dividend cuts and share price declines. “