AR Global’s New York REIT Reaches Settlement with Dissident Shareholders
AR Global-managed New York REIT Inc. (NYSE: NYRT), a former non-traded real estate investment trust known as American Realty Capital New York Recovery REIT, entered into a settlement agreement with Michael Ashner, Steven Witkoff, and their jointly owned entity, WW Investors LLC.
As a result, the company will expand its board of directors to include James Hoffmann, Gregory Hughes and Craig Bouchard as new independent directors, effective immediately. The board will now comprise nine directors, as opposed to six, eight of whom are considered independent. The company said that it will also opt out of the Maryland Unsolicited Takeover Act.
Hoffmann is a former partner and senior vice president of Wellington Management Company, a private, independent investment management company. Hughes is currently a principal of Roscommon Capital Limited Partnership, a financial advisory and investment firm. Bouchard serves as the chairman of the board and CEO of Cambelle-Inland LLC, a small, private entity created in 2013 through which he manages certain investment activities in China.
“We welcome open dialogue with and input from our stockholders and are pleased to have reached this agreement with WW Investors, which we believe represents a positive outcome for all NYRT stockholders,” said Randolph Read, chairman of the board.
Ashner and Witkoff, who own more than 1.2 million shares combined, were outspoken opponents of the now terminated merger agreement with private real estate firm JBG Companies. After terminating the merger, which would have created an $8.4 billion REIT with properties in New York and the Washington D.C. area, the board announced its intention to dissolve and liquidate the company, upon shareholder approval. The pair continued their fight after the liquidation announcement, proposing a slate of five directors to oversee the process – which included Hoffman and Hughes.
The appointment of Hoffmann, Hughes and Bouchard is pursuant to a settlement agreement between the company and WW Investors. Under the terms of the agreement, which include the company’s agreeing to take all action necessary to opt out of MUTA, WW Investors has agreed to vote its shares in support of NYRT’s slate of nine director nominees at the company’s 2016 annual meeting of stockholders, which will be held simultaneously with a stockholder vote on the proposed plan of liquidation. The company said that it plans to disclose these nominees “in due course.”
In addition, WW Investors will withdraw its nomination of candidates to stand for election at the annual meeting, and has agreed to customary standstill provisions through December 31, 2017. New York REIT has also agreed to reimburse WW Investors’ expenses up to $700,000.
The company’s agreement to opt out of MUTA, which would have permitted the board to stagger its members without stockholder approval, is irrevocable unless first approved by the stockholders with an affirmative vote of a majority of the votes cast.
In other New York REIT news, the company recently received 14 management proposals to serve as the company’s external manager after the board of directors issued a proposal request for an external manager to replace New York Recovery Advisors, which is managed by AR Global Investments – the successor business to AR Capital.
NYRT is a publicly traded real estate investment trust that owns 19 commercial real estate properties, including office and retail properties, located in New York City. Shares of NYRT closed at $9.71 on Monday.
