A Look at Jeffrey Smith, Starboard Value’s Potential Activist Targets

According to Bloomberg, Brookfield offered to pay approximately $6.4 billion for Forest City Realty Trust Inc (NYSE:FCE.A) or $23.95 per share. A recent report by BMO Capital Markets estimates Forest City’s net asset value at $28.69 per share. So, it is very likely that the company will reject Brookfield’s offer. If Smith and Starboard go activist, we could expect Forest City to drive a harder bargain.

Value in Unappealing Retail Real Estate?

Another Real Estate Investment Trust that has caught Jeffrey Smith’s eye is Macerich Co (NYSE:MAC), one of the largest owners and managers of shopping centers in the United States. During the 2017 fourth quarter, Starboard increased its stake in Macerich by 20% to 600,000 shares. Activists Dan Loeb and Jonathan Litt are also invested in the company. According to the latest regulatory filings, Loeb’s Third Point holds 1.42 million shares, while Litt’s Land & Buildings Investment Management has initiated a fresh stake during the fourth quarter, having acquired 453,834 shares.

Back in November 2017, news emerged that Macerich Co (NYSE:MAC) adopted a new cash-severance plan for senior executives. Whereas before this move top executives faced getting almost nothing in severance pay in case they lost their jobs following a sale of the company, the new plan insure they would split $32 million in compensation should they leave the company or lose their jobs within two years of a change in control. Investors took this as a sign that Macerich Co (NYSE:MAC) was gearing up for a sale. According to a January report by Bloomberg, Ontario Teachers’ Pension Plan Board, which is the company’s largest shareholder, is gathering support for a takeover.

Disclosure: none.