Brookfield Asset Management Inc. finally reached a deal to buy Forest City Realty Trust Inc. for $6.8 billion and assumption of $4.6 billion in debt. Under the terms of the agreement, Brookfield will acquire all of the outstanding common stock of Forest City for $25.35 per share, as well as Forest City’s proportionate share of consolidated and unconsolidated debt. The proposed transaction has been recommended by the board of directors of Forest City and is expected to close in the fourth quarter of 2018. Affiliates of Starboard Value LP and Scopia Capital Management LP, which own approximately 14 percent of Forest City’s outstanding shares, have agreed to vote their shares in favor of the transaction. Completion of the deal is subject to closing conditions, including the approval of Forest City’s stockholders. The transaction is not contingent on receipt of financing and Forest City does not expect to pay its regular quarterly dividend during the pendency of the transaction. Rumors of the Brookfield’s acquisition of Forest City have been circulating since February. You can read our coverage here. The Brookfield deal, like others in M&A, is being affected by the #MeToo movement. Bloomberg reported that advisers are adding clauses to merger agreements that protect buyers if inappropriate executive behavior is revealed later. The policy, which is being referred to as “the Weinstein clause,” can give buyers the right to claw money back, with sellers having to put as much as 10 percent of what they receive in escrow just in case. Brookfield’s agreement with Forest City Realty Trust reportedly includes a statement that no allegations of sexual harassment had been made against any employees at senior vice president level or above in the last five years. The Forest City portfolio comprises a number of iconic assets across major gateway U.S. cities, including 6.3 million square feet of high-quality office space, 2.3 million square feet of premier life science assets, primarily in Cambridge, Massachusetts, 2.2 million square feet of retail space and 18,500 multifamily units, as well as five large-scale development projects in the New York Metro area, San Francisco and Washington, D.C.
