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Cedar Realty asked by hedge fund to consider selling itself

The logo for Port Washington-based Cedar Realty Trust

The logo for Port Washington-based Cedar Realty Trust Inc. Credit: Cedar Realty Trust Inc.

An activist Manhattan investment fund Wednesday sent a letter to board members of Cedar Realty Trust Inc. urging the Port Washington-based real estate company to “explore all strategic alternatives, including a sale of the company.”

The hedge fund, Snow Park Capital Partners LP, owns 3.4 million shares, or 3.7 percent of the outstanding stock, according to government filings compiled by Bloomberg News.

In response, Cedar Realty Trust issued a statement Wednesday saying that it welcomes shareholder input and that its board and management team regularly explore “sales of single assets and subsets of its portfolio” and sold off 80 of the 140 assets it owned as of June 2011.

Cedar Realty is a real estate investment trust whose 61-property portfolio consists primarily of supermarket-anchored shopping centers in the corridor between Washington, D.C., and Boston.

“The board and management team are committed to creating long-term value for shareholders and will continue to take action to achieve that objective,” Cedar Realty said.

The hedge fund’s letter said Cedar Realty stock should be valued at $7 to $8.25 per share, including compensation to management as the result of a sale. That would be more than $1 above the stock’s recent trading price. Snow Park also said it plans to explore “all options,” including nominating board members at the 2018 annual meeting of shareholders.

The letter assailed the leadership of Cedar Realty president and chief executive Bruce Schanzer, saying that during his tenure starting in June 2011, the company’s shares have lagged while top executives have been richly rewarded.

Snow Park urged the board to “make clear to the market that the days of excessive management pay will end” when the contracts of Schanzer and chief financial officer Philip Mays expire in June 2018.

“Since 2011, cumulative compensation to just the top two executives and the board will have totaled over $40 million by the time Mr. Schanzer’s contract expires in June 2018,” the letter said.

A call to Cedar Realty seeking additional comment was not immediately returned.

Shares of Cedar Realty Trust edged down 0.2 percent to close Wednesday at $5.55. The stock has fallen about 18 percent in the past 12 months.

In July, Snow Park said it had bought a stake in department store chain Dillard’s Inc. and called on the Little Rock, Arkansas, retailer to explore ways to tap the value of its real estate portfolio.

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