Ashner and Witkoff blast proposed NY REIT, JBG merger

NYRT shareholders to explore running slate of new directors “to replace the current board”

TRD New York /
Jun.June 06, 2016 01:30 PM

Michael Ashner and Steve Witkoff fired off their latest shareholder letter to the board of New York REIT on Monday, expressing “numerous substantial and serious concerns” over the company’s proposed merger with private real estate investment firm JBG Companies.

Ashner and Witkoff’s WW Investors described the deal – which would see the two companies combine to form an $8.4 billion publicly traded new entity, JBG Realty Trust, as “materially detrimental to the interests of all NYRT stockholders.”

“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,” Ashner wrote, citing New York REIT’s “precipitous stock price decline” after last month’s news of the merger.

They said they would exploring replacing New York REIT’s board, and brainstorm alternatives to the merger, including a cash sale of the company or a liquidation of New York REIT’s assets.

The letter added that Ashner and Witkoff would “actively encourage” fellow New York REIT stockholders “to reject the proposed JBG transaction and put an end to this ongoing lunacy,” and are not seeking to acquire the company or its assets themselves.

Ashner and Witkoff previously penned a letter to the New York REIT board last month, criticizing the company – which at the time was in merger talks with Maryland-based JBG — for ignoring overtures from an unnamed public company that Ashner said was “enthusiastic” about a possible acquisition of the REIT.

If the proposed merger receives approval from New York REIT shareholders, JBG Realty Trust would be comprised mostly of JBG assets – which are predominately located in and around the Washington, D.C. metro area. Only 22 percent of the combined company’s portfolio, by rentable square feet, would be located in New York.

JBG is also withholding around $1.8 billion in assets – nearly three dozen properties — from the combined entity, according to regulatory filings detailing the deal.

The merger would also terminate New York REIT’s external management contract with Nicholas Schorsch’s AR Global, which shareholders and analysts have cited as one of the causes for New York REIT’s underperforming stock price since the company went public in April 2014.

Representatives for both New York REIT and JBG declined to comment.


Related Articles

arrow_forward_ios
From left: Colgate chairman Ian Cook and 1115 Fifth Avenue and 912 Fifth Avenue (Credit: Cuny, StreetEasy)

He sold enough toothpaste to buy this tony Carnegie Hill pad

Normandy Founder Finn Wentworth, Columbia CEO E. Nelson Mills, 799 Broadway and 250 Church Street (Credit: Google Maps)

Columbia acquiring Normandy for $100M in New York real estate’s latest megamerger

Steve Witkoff and the property at 2805 Lake Avenue

Developer Steve Witkoff revealed as buyer of Sunset Islands home

From left: Stewart's Frederick Eppinger, FTC's Joseph Simons and Fidelity's Raymond Quirk (Credit: Getty Images and iStock)

Title insurance’s Big Three are not to be: Fidelity, Stewart call off $1.2B merger

Steve Witkoff and 150 Charles Street

Steven Witkoff gets $33M for his penthouse at a West Village building he developed

The fifth floor and exterior of 420 Fifth Avenue with Rudder Property Group's Michael Heller (left) and Michael Rudder (Credit: Rudder Property Group)

Witkoff sells two commercial condos at
420 Fifth for $52M

Jungle leaves background

Sam Zell talks “jungle” entrepreneurs, “dearth” of mergers

Schrager, Witkoff snag $173M refinancing of Public hotel

Schrager, Witkoff snag $173M refinancing
of Public hotel

arrow_forward_ios
Loading...