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Supplement to the Proxy Statement/Prospectus
dated October 17, 2006
On October 17, 2006, Reckson
Associates Realty Corp. filed a proxy statement/prospectus relating
to its proposed merger with SL Green and its affiliates. The
discussion below supplements the section thereof entitled "SPECIAL
FACTORS – Background of the Merger."
On November 16, the Wall Street
Journal published a story speculating that Carl Icahn and Macklowe
Properties were in the process of preparing a bid for Reckson. An
offer letter dated November 15 was subsequently received by Reckson
on November 16. The letter stated that Rome Acquisition Limited
Partnership, a partnership formed between affiliates of Harry
Macklowe and William S. Macklowe and affiliates of Carl C. Icahn,
was submitting a proposal to acquire all of the outstanding shares
and units of Reckson in a transaction that would provide Reckson
shareholders and unitholders with $49 per share in cash. In that
letter, Rome stated that it anticipated completion of due diligence
and execution of a definitive acquisition agreement within 10
business days. A copy of this letter was filed as an Exhibit to
Reckson’s Current Report on Form 8-K dated November 17, 2006
and is incorporated herein by reference.
This letter had been preceded in
mid-October 2006 by a comment by Harry and William Macklowe to
Lewis S. Ranieri, one of the members of the Reckson Board of
Directors, that they were disappointed they had not gotten a chance
to conduct due diligence on Reckson's assets and that they likely
would have been interested in bidding for them. Also, on November
2, 2006, Harry Macklowe sent an email to Reckson requesting access
to due diligence materials with respect to Reckson’s assets
but did not make any specific proposals with respect to those
assets. On November 7, 2006, Peter Quick, Reckson’s lead
independent director, sent a letter to Harry Macklowe informing him
that his request was denied because it did not meet the requisite
standard for providing such access under the terms of
Reckson’s merger agreement with SL Green.
In the afternoon on November 16,
Reckson’s board met telephonically to discuss the proposal
from Rome Acquisition Limited Partnership. Reckson’s board
determined by a vote of its independent directors and in accordance
with the terms of its existing merger agreement with SL Green that
the Rome proposal met the standards set forth in the SL Green
merger agreement to permit Reckson to provide nonpublic information
to Rome and to participate in discussions and negotiations with
Rome. Following that Board meeting, Reckson and Rome entered into a
confidentiality agreement.
Later that evening on November 16,
at the invitation of Reckson’s board, Messrs. Harry Macklowe,
William Macklowe and Carl Icahn, together with their respective
legal and financial advisors, met with representatives of Goldman
Sachs and Wachtell, Lipton, Rosen & Katz, the Affiliate
Transaction Committee’s financial and legal advisors, at the
offices of Wachtell Lipton.
At the November 16 meeting, as
directed by Reckson’s Affiliate Transaction Committee,
Goldman Sachs and Wachtell Lipton asked Messrs. Macklowe and Icahn
and their advisors a number of questions about the terms of their
proposal. Specifically, Reckson’s advisors inquired as to the
sources of Rome’s expected financing and whether Rome had
accurately accounted for
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all costs associated with a transaction in
arriving at the $49 per share offer. Following these discussions,
Rome orally confirmed that after consideration of the costs
associated with a transaction they were still offering $49 per
share, subject to the terms of their initial letter.
Reckson’s advisors also inquired as to whether Rome could
structure their proposed transaction as a cash tender offer to
minimize any timing differences between Rome’s proposed
transaction and SL Green’s proposed transaction. In addition,
Reckson’s advisors discussed the fact that Rome was a newly
formed entity without any assets or business and requested that
Rome consider mechanisms such as a letter of credit so that Reckson
would have recourse to a credit worthy entity if Rome did not
complete their proposed transaction with Reckson in accordance with
the terms of any merger agreement they might enter into.
On November 17, Reckson’s
advisors reported on the events of the November 16 meeting at a
meeting of Reckson’s board and Affiliate Transaction
Committee. Reckson immediately thereafter made an online data room
available to Rome containing all of the information that had been
available to other auction participants as well as updated
information to reflect developments since the date of the SL Green
merger agreement. Reckson also advised Citigroup, one of
Reckson’s financial advisors in connection with SL Green
transaction, that Reckson would consent to Citigroup seeking to
participate in Rome’s financing as long as customary internal
safeguards were utilized with respect to confidential information.
Reckson’s advisors requested that Rome re-confirm its $49 per
share offer and submit a proposed merger agreement by November
19.
Later in the afternoon of November
17, after discussions with SL Green, Reckson’s board
adjourned the date of Reckson’s special meeting of
stockholders to November 28, 2006.
On November 19,
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