New York REIT — Proxy Contest (June 2016)
16 slides from New York REIT's proxy contest presentation, Jun 21, 2016
Slide 1: NY REIT - JBG Proposed Combination: A path to the sure destruction of NYRT shareholder value
WW Investors, LLC NY REIT - JBG Proposed Combination: A path to the sure destruction of NYRT shareholder value 3736091-1
Slide 2: Disclaimer
Disclaimer This presentation with respect to New York REIT, Inc. (“NYRT” or, the “Company”) is for general informational purposes only, is not complete and does not constitute legal, tax, investment, financial or other advice or a recommendation to enter into or conclude any transaction or buy or se
Slide 3: Table of Contents
TABLE OF CONTENTS I. Executive Summary II. NYRT Flawed & Incomplete Valuation III. Depressed Post - Combination Valuation Analysis IV. JBG Self-Valuation Issues V. Nick Schorsch and Company - Failure of Process & Conflict of Interest VI. The “Return” of JBG VII. More Questions Than Answers VIII. Con
Slide 4: Executive Summary
Executive Summary WW Investors, LLC (“WW Investors” “we”, or “our”), a beneficial owner of more than one million shares of NY REIT, Inc. (“NYRT” or, the “Company”) common stock, intends to vote against the proposed combination of NYRT, New York Recovery Operating Partnership, L.P. and JBG Properti
Slide 5: NYRT Flawed & Incomplete Valuation
NYRT Flawed & Incomplete Valuation A true assessment of post Combination value is difficult to calculate as there are no references to traditional REIT metrics of value (e.g., AFFO, FFO, CAD, etc.). The only references in the Combination's presentation materials from which we could derive a valuatio
Slide 6: Depressed Post-Combination Valuation Analysis: Poor Positioning vs. NYRT/JBG Selected Peer Group
Depressed Post-Combination Valuation Analysis: Poor Positioning vs. NYRT/JBG Selected Peer Group The charts on the following slides provide post-Combination projected trading ranges for the combined company’s shares. These charts were prepared without the benefit of any projected AFFO, FFO, CAD or
Slide 7: Depressed Post-Combination Valuation Analysis
Depressed Post-Combination Valuation Analysis: If one adopts the Combination's projections on an unquestioned basis, the projected dividend of $0.15 to $0.20 per share and range the yield from 3.5% to 4.25% to better reflect leverage, risk and diversification, it is not unreasonable to assume a po
Slide 8: Depressed Post-Combination Valuation Pricing: Dividend Yield = Low Share Trading Price
Depressed Post-Combination Valuation Pricing: Dividend Yield = Low Share Trading Price NYRT projects a “dividend range of $0.15 - $0.20 per share per annum post-closing”(1) Based on the NYRT/JBG selected peer group,(2) this dividend yield range would result in a per share post-closing trading pric
Slide 9: Depressed Post-Combination Valuation Analysis: Excessive Leverage
Depressed Post-Combination Valuation Analysis: Excessive Leverage High barrier gateway market-focused mid and large cap peers Net Debt/EBIDTA (1) 14 12 11.0 – 12.0x (2, 3) 10.0x 10 8.9x 8 7.7x 7.4x 6 5.6x 4.9x 4 2 0 Proforma JBG Combination (2) ESRT PGRE DEI SLG BXP VNO The Combined Company Would
Slide 10: JBG Self-Valuation Issues
JBG Self-Valuation Issues NYRT/JBG have provided no direct valuation of JBG to NYRT shareholders. Based on a host of questionable assumptions provided on page 28 of their presentation, JBG derives an implied equity valuation of approximately $3.126B, formulated on a combined enterprise value of $8
Slide 11: JBG Self-Valuation Issues (continued)
JBG Self-Valuation Issues (continued) Pre-Development – The NYRT valuation ignores that pre-development properties have all of the risks of the construction assets without any of the approvals and entitlements. Again, for the sake of argument let’s take all of NYRT’s assumptions but acknowledge th
Slide 12: Nick Schorsch and Company - Failure of Process & Conflict of Interest
Nick Schorsch and Company - Failure of Process & Conflict of Interest In connection with the Combination, Nick Schorsch and Co. will receive vesting of 1.2M already owned LTIPs, 2.6M additional LTIPs, a $7M termination fee and a $3M consulting fee. If this had been a straightforward sale or liquid
Slide 13: The "Return" of JBG
The “Return” of JBG A Superb Result (for JBG management) – We understand JBG’s desire to achieve the singularly most lop-sided strategic transaction that we have ever seen. Unfortunately for NYRT stockholders, this resourcefulness is directly on our backs. We are not JBG investors but are the lose
Slide 14: The "Return" of JBG (continued)
The “Return” of JBG (continued) MUTA REDUX – In our view, if members of JBG management were truly concerned for the welfare of NYRT shareholders, they should have insisted that the NYRT Board of Directors opt out of MUTA now, when shareholders could actually benefit from it. Excluded Properties
Slide 15: More Questions Than Answers
More Questions Than Answers Lack of Board Unanimity – A 5-1 vote. Who can recall a strategic transaction as important or valuable as the proposed Combination for which there was any dissent on a board of directors voting on the transaction? Did fiduciary duty take a back seat to self-interest? P
Slide 16: Conclusion
Conclusion In our view, if the Combination occurs, the NYRT share price will trade at a substantial discount to current market prices and as low as 50% or more of current NAV. Based on our analysis, the Combination presentation materials and NYRT’s management statements suggest an NYRT share ran