Jeremy Mindich and Matthew Sirovich, the managers of Scopia Capital, have stepped up their activist efforts regarding Forest City Realty Trust Inc (NYSE:FCE.A). In a recent filing with the Securities and Exchange Commission, Scopia made public a presentation delivered to the Chairman of the company’s Board, in which its representatives urged the company to revamp its stock structure. The fund currently holds 17.9 million of the company’s Class A shares or 7.4% of Forest City’s common stock.
Established in 1920 by the Ratner family as a building materials provider, Forest City Realty Trust Inc (NYSE:FCE.A) has grown into a reputable real estate developer worth more than $6 billion. Over the years the company has kept its initial dual-class stock structure, with the Ratners controlling 92% of the Class B shares that carry voting rights. Scopia Capital and other investors have been advocating for a change of that structure for some time, as the company’s stock is trading at a discount to net asset value, while its peers are trading mostly at a premium. So far this year, Forest City shares have risen by 7% in comparison to the approximately 13% gains exhibited by the MSCI US REIT Index.
In the presentation, Scopia Capital argues that the dual-structure is hurting the company and is thus pushing for its elimination in the hopes that it will align Forest City with “corporate governance best practices and would lead to unlocking value for all shareholders.” However, management continues to reject such efforts, stating its intention to boost the stock through other measures. During an earnings call with investors on Friday, the company’s management said that it plans to sell some assets and improve its margins, and would consider addressing the issue of the stock structure only if those efforts do not generate the desired results.
Forest City Realty Trust Inc (NYSE:FCE.A) issued its second quarter financial report on August 5, registering $96.9 million in funds from operations, which translates into $0.36 per share. The company also posted net income of $26.6 million or $0.10 per share for the period. Forest City was in the portfolios of 40 of the hedge funds and other investment vehicles monitored by Insider Monkey as of March 31.
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You can access the original SEC filing by clicking here.
Ownership Summary Table
| Name | Sole Voting Power | Shared Voting Power | Sole Dispositive Power | Shared Dispositive Power | Aggregate Amount Owned Power | Percent of Class |
|---|---|---|---|---|---|---|
| Scopia Capital Management | 0 | 17,934,996 | 0 | 17,934,996 | 17,934,996 | 7.4% |
| Scopia Management, Inc | 0 | 17,934,996 | 0 | 17,934,996 | 17,934,996 | 7.4% |
| Matthew Sirovich | 0 | 17,934,996 | 0 | 17,934,996 | 17,934,996 | 7.4% |
| Jeremy Mindich | 0 | 17,934,996 | 0 | 17,934,996 | 17,934,996 | 7.4% |
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Page 1 of 10 – SEC Filing
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 1)*
Forest City
Realty Trust, Inc.
(Name of Issuer)
Class A Common Stock, $0.01 par value per share
(Title and Class of Securities)
345605109
(CUSIP Number)
Samantha Nasello
Scopia Capital Management LP
152 West 57th St., 33rd Floor
New York, NY 10019
(212)
370-0303
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
August 8, 2016
(Date of
Event Which Requires Filing of Statement)
If the filing person has
previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check the following box. x
Note. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b)
for other parties to whom copies are to be sent.
| * | The remainder of this cover page shall be filled out for a reporting persons initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. |
The information required on the remainder of this cover page shall not be
deemed to be filed for the purpose of Section 18 of the Securities Exchange Act of 1934 (Act) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act
(however, see the Notes)
