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Paramount Group Board Unanimously Rejects $9.50-$10.50/Share Cash Offer From Bow Street

Paramount Group, Inc. (NYSE:PGRE) (“Paramount” or the “Company”) today announced that its Board of Directors has unanimously rejected an unsolicited proposal received from Bow Street LLC

· 11/16/2020 16:17

Paramount Group, Inc. (NYSE:PGRE) (“Paramount” or the “Company”) today announced that its Board of Directors has unanimously rejected an unsolicited proposal received from Bow Street LLC (“Bow Street”) on November 4, 2020 to acquire all of the Company’s outstanding shares for between $9.50 and $10.00 per share in cash.

Consistent with its fiduciary duties, the Paramount Board engaged extensively with Bow Street and carefully reviewed and considered Bow Street’s proposal. As part of this, the Company had several discussions with and hosted representatives of Bow Street at Paramount’s offices so that Bow Street could present its proposal directly to a majority of Paramount’s Board members. Following this presentation and a thorough evaluation of Bow Street’s proposal conducted in consultation with financial and legal advisors, the Board unanimously determined that the proposal is inadequate, significantly undervalues Paramount and is not in the best interest of the Company and all its stockholders.

In making its determination, the Board considered, among other things, Paramount’s successful recent portfolio transformation, trophy and Class A assets in premier markets, leading, fully integrated operating platform, and the outsized but temporary impact the COVID-19 pandemic is currently having on the real estate industry. The Board also considered recent news regarding promising COVID-19 vaccine candidates, and noted that Paramount’s stock price has increased by approximately 40% since such news was first announced on November 9, 2020.

“The Paramount Board is open to all opportunities to enhance stockholder value, and we engaged extensively with Bow Street and carefully considered its proposal with this in mind,” said Albert Behler, Chairman, Chief Executive Officer and President of Paramount. “While we are pleased Bow Street recognizes that Paramount’s value significantly exceeds the value implied by current trading prices, the Board determined that Bow Street’s proposal is wholly inadequate, opportunistic in its timing and significantly undervalues the Company and its compelling prospects for long-term value creation. Among other things, Bow Street’s proposed pricing range is materially lower than our pre-COVID-19 trading levels and significantly undervalues our assets based on their intrinsic value. Importantly, we remain open-minded about all opportunities to create additional value and will continue to take actions that are in the best interest of Paramount and all of its stockholders.”

The Paramount Board and management team are focused on capitalizing on the Company’s best-in-class operating platform to reposition its portfolio of trophy and Class A assets and drive enhanced operational and financial performance and stockholder value. In recent years, the Company has successfully transformed its portfolio by harvesting capital from stabilized assets and recycling that capital into share repurchases and higher-growth opportunities. Paramount has a proven track record of leveraging its best-in-class, fully integrated operating platform to reposition and increase the value of these assets, re-leasing space to high credit-quality tenants at attractive mark-to-markets to improve the properties’ growth profiles and attractiveness to the market. The Company has also prudently structured acquisitions as joint ventures, enabling it to minimize downside risk while providing Paramount with the opportunity to further enhance returns through fees generated by managing and leasing the assets. The Paramount Board and management team are confident the Company is well-positioned to drive long-term value-creation.

The full text of the letter sent by the Paramount Board of Directors to Bow Street is below:

November 16, 2020

Mr. Akiva Katz
Mr. Howard Shainker
Managing Partners
Bow Street LLC
595 Madison Avenue
New York, New York 10022

Dear Akiva and Howard:

This will respond on behalf of our Board of Directors to your proposal provided on November 4, 2020 and set forth in your presentation to the Board on November 5, 2020.

Our Board has fully and carefully reviewed and considered your proposal, with the benefit of advice from our external financial and legal advisors. The Board has unanimously determined that your proposal is inadequate and significantly undervalues Paramount Group, Inc. (“Paramount”).

Our Board and management team remain open-minded, and we will continue to thoroughly consider all opportunities to enhance stockholder value. As always, we are committed to advancing the best interests of Paramount and all of our stockholders.

Very truly yours,

Albert P. Behler
Chairman of the Board of Directors

BofA Securities is acting as Paramount’s financial advisor, and Goodwin Procter LLP and Wachtell, Lipton, Rosen & Katz are acting as legal counsel.