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Forest City Says It's Considering Options Including a Merger

The Cleveland-based real estate investment trust, with $8.2 billion in assets, will look at a range of options while it continues its current strategies.

(Bloomberg)—Forest City Realty Trust Inc., a property company that has faced pressure from an activist investor, said it’s considering alternatives to increase shareholder value, including a potential merger or acquisition.

The Cleveland-based real estate investment trust, with $8.2 billion in assets, will look at a range of options while it continues its current strategies, according to a  statement Monday. In the past several years, Forest City has worked to pay down debt, reduce complexity and reform its corporate governance while focusing on core urban markets.

The company is dedicated to “pursuing the right course of action for our company and all stockholders,” James A. Ratner, non-executive chairman, said in the statement. “During this time, the entire Forest City team remains focused on the company’s operations and committed to closing the gap between our share trading price and net asset value.”

Forest City -- best known for Pacific Park, its 6,430-unit mainly residential project in downtown Brooklyn, originally known as Atlantic Yards -- has been under pressure by Land & Buildings Investment Management’s Jonathan Litt, who in April said Forest City to would attract numerous bidders if it put itself up for sale.

A representative for Land & Buildings wasn’t immediately available for comment.

The shares have advanced 23 percent this year through Sept. 8. They were up 1.2 percent to $25.96 at 10:06 a.m. New York time Monday.

The Ratner family founded Forest City in 1920, according to its website. The company built the New York Times headquarters tower on Eighth Avenue in Manhattan, and a Frank Gehry-designed residential tower on Spruce Street in lower Manhattan. At Pacific Park, Forest City has teamed up with China’s Greenland Holding Group, which has a 70 percent stake in the development.

Forest City is working with investment banks Lazard Ltd. and Goldman Sachs Group Inc. Sullivan & Cromwell LLP is providing legal advice.

--With assistance from Scott Deveau.To contact the reporter on this story: Heather Perlberg in Washington at [email protected] To contact the editors responsible for this story: Daniel Taub at [email protected] Christine Maurus

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