(Bloomberg)—New York REIT Inc. said the company is planning its liquidation, the culmination of a strategic review pushed by shareholders to boost value.
The real estate investment trust will seek to sell its assets and return the proceeds to shareholders, pay off its debt and delist from the New York Stock Exchange, the company said in a statement on Monday. Between $8.73 and $11.50 a share will be returned to stockholders, according to the company. New York REIT’s management would also consider selling the company to a buyer.
The plan “will maximize value for our stockholders, while also preserving the flexibility to pursue a sale of the company, should a compelling offer that delivers superior value be made,” Chief Executive Officer Michael Happel said in the statement.
New York REIT shares fell 0.9 percent to $9.95 at 10:40 a.m. in New York, after earlier slipping as much as 1.8 percent, the most since June. The company is down 14 percent this year, compared with a 10 percent increase in the Bloomberg REIT Index.
The office and retail-property owner began a strategic process following at least a year of criticism of the company’s management by shareholder WW Investors LLC. New York REIT announced earlier this month its merger talks with Washington landlord JBG Cos. were scrapped and it would sell properties it owns individually.
WW Investors, jointly owned by Michael Ashner and Steven Witkoff, has criticized the REIT’s external manager. That entity had connections to investor Nicholas Schorsch, who’s resigned from the board of New York REIT and 12 other companies in late 2014 following the disclosure of accounting inaccuracies at another of his companies, American Realty Capital Properties Inc.
“WW Advisors is extremely skeptical as to the ability of the current board to implement a plan of liquidation fairly, efficiently and in a manner that will maximize value to shareholders,” Ashner said by phone today following the announcement.
New York REIT’s buildings are mostly in Manhattan and include a stake of almost 49 percent in Worldwide Plaza, a 1.8 million-square-foot (167,000-square-meter) skyscraper on Eighth Avenue that contains the Americas headquarters of Nomura Holdings Inc.
New York REIT will refinance its credit facility to repay it in full, while continuing a previously announced plan to acquire the portion of Worldwide Plaza it doesn’t already own. The liquidation plan needs shareholder approval and the company said it will hold a special meeting and file financial documents “in the near future.”
Sheila McGrath, an analyst at Evercore ISI, said the New York-based company had better options than the liquidation and that a new board of directors must be installed immediately.
“The fact that this board would announce pursuing this strategy demonstrates the impairment on value that their continued entrenchment inflicts on NYRT shareholders,” McGrath said in an e-mail.
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