UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
| o | Preliminary Proxy Statement |
| o | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| o | Definitive Proxy Statement |
| o | Definitive Additional Materials |
| þ | Soliciting Material Pursuant to § 240.14a-12 |
| NRDC ACQUISITION CORP. |
| (Name of Registrant as Specified In Its Charter) |
| Not Applicable |
| (Name of Person(s) Filing Proxy Statement, if Other Than the Registrant) |
Payment of Filing Fee (Check the appropriate box):
| þ | No fee required. | |
| o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |
| (1) | Title of each class of securities to which transaction applies: | |
| (2) | Aggregate number of securities to which transaction applies: | |
| (3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): | |
| (4) | Proposed maximum aggregate value of transaction: | |
| (5) | Total fee paid: | |
| o | Fee paid previously with preliminary materials. | |
| o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |
| (1) | Amount previously paid: | |
| (2) | Form, Schedule or Registration Statement No.: | |
| (3) | Filing Party: | |
| (4) | Date Filed: | |
This filing consists of an investor presentation made by Richard A. Baker, Chief Executive Officer of NRDC Acquisition Corp., and Stuart Tanz in a series of meetings beginning August 27, 2009 in connection with the proposed transactions contemplated by the Framework Agreement, dated as of August 7, 2009, between NRDC Acquisition Corp. and NRDC Capital Management, LLC, pursuant to which NRDC Acquisition Corp. will continue its business as a corporation that will qualify as a real estate investment trust for U.S. federal income tax purposes, commencing with its taxable year ending December 31, 2010.
Investor Presentation
Notices
Forward-Looking Statements
This investor presentation includes “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934 and certain statements and comments made during the course of this call including statements regarding the expected completion and effects of the proposed transactions are considered forward looking statements as defined in Section 21E of the Securities Exchange Act of 1934. These statements include risks and uncertainties and assumptions that may cause actual results to differ. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, our expectations with respect to future performance, anticipated financial impacts of the proposed transactions, certificate of incorporation and warrant amendments and related transactions; approval of the proposed certificate of incorporation and warrant amendments and related transactions by stockholders and warrantholders, as applicable; the satisfaction of the closing conditions to the proposed transactions, certificate of incorporation and warrant amendments and related transactions; and the timing of the completion of the proposed transactions, certificate of incorporation and warrant amendments and related transactions. For a description of risks that could cause actual results to differ materially from these forward-looking statements please review the press releases and reports filed by us with the SEC. All forward-looking statements are based on information available to us on the date of this call and we do not undertake any obligation to publicly update or revise any forward-looking statements as a result of new information in the future.
Note to Investors
In connection with the proposed transactions we have filed a preliminary proxy statement regarding the proposed transactions with the SEC and intend to mail a definitive proxy statement to our stockholders and warrantholders. Before making any voting decision investors are urged to read the preliminary proxy statement and the definitive proxy statement when it becomes available because they contain important information about the proposed transactions. Stockholders and warrantholders will also be able to obtain a copy of the preliminary and definitive proxy statements, without charge, once available, at the SEC’s Internet site at http://www.sec.gov or by directing a request to: NRDC Acquisition Corp., 3 Manhattanville Road, Purchase, NY 10577, Attention: Joseph Roos, Telephone (914) 272-8066.
We and our directors, executive officers, affiliates and other persons may be deemed to be participants in the solicitation of proxies for the special meetings of our stockholders and warrantholders to approve the proposed transactions. A list of the names of those directors and officers and descriptions of their interests in us is contained in our annual report. You may also obtain additional information about the interests of our directors, officers and stockholders in the proposed transactions by reading the preliminary proxy statement that we filed and the definitive proxy statement and other relevant materials that we will file with the SEC when they become available.
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Overview
Overview
Company:
Transaction Type:
REIT Book Equity Value:
Public Shares Outstanding:
Ticker/Exchange:
NRDC Stock Price
Trust Value per Share:
Warrants Outstanding:
Public
Founders
Total
Estimated Transaction Timeline:
Record Date
Shareholder Meeting Date
Closing Date
(1) NRDC Acquisition Corp. (“NRDC”) to be named Retail Opportunity Investments Corp. (“ROI”).
(2) Includes 150,000 shares to be retained by non-founder related directors.
Retail Opportunity Investments Corp. (“ROI”) (1)
Conversion to perpetual existence equity retail REIT
Up to approx. $400 million
41.5 million (2)
“NAQ” / NYSE Amex
$9.82 (August 26, 2009)
$9.89 (July 31, 2009)
41.4 million
8.0
49.4 million
TBD
Late October
Late October
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Transaction Overview
Convert NRDC into a equity retail REIT
Elect REIT status in 2010
Amend charter to provide for perpetual existence
Change name to Retail Opportunity Investments Corp.
Add customary REIT ownership limitations and related provisions
Increase authorized shares from 106 million to 550 million shares
Eliminate classified status of Board of Directors
Strengthen alignment of interest and eliminate founder shares
CEO has begun to acquire shares and is committed to invest $5.0 million
Founders to cancel 10.125 million shares
Each non-founder related director to reduce shares held from 45,000 to 25,000
Amend existing warrants outstanding to mitigate dilution to stockholders
Increase exercise price from $7.50 to $12.00 per share
Extend maturity by three years to October 23, 2014
Increase redemption call price from $14.25 to $18.75 per share ($22.00 for founder warrants)
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Management & Board of Directors
Experienced Senior Management
Former Chairman, CEO of Pan Pacific Retail
Properties Inc. (”PNP”) (‘97 to ‘06)
During 9-year tenure, PNP:
Acquired $2 billion of retail assets with over 18 million s.f.
Grew market cap from $447 million to over $4 billion
Acquired Center Trust (NYSE: CTA) in ‘03 for $600 million
Acquired Western (AMEX: WIR) in ‘00 for $440 million
Achieved total return to shareholders over 500% since IPO
Sold PNP for $4.1 billion to Kimco (NYSE: KIM) in ‘06
Achieved 95%+ occupancy each quarter, averaging 97%
Increased same-property NOI every quarter, averaging 4%
Produced double-digit growth in same-store re-leasing
rents every quarter, averaging 15%
Former CFO of New Plan Excel Realty Trust
(“NLX”) (‘00 to ‘07)
During 7-year tenure, NLX:
Grew market capitalization by $2.2 billion
Added over 110 retail and apartment properties
Achieved total return to shareholders over 300%
Sold to Centro for $6.2 billion in ‘07
Stuart Tanz - CEO
John Roche – CFO (1)
Richard Baker – Executive Chairman
Former President of National Realty
Development Company (‘97-’06) which:
Owns and manages a retail real estate portfolio in excess of
18 million s.f. in 20 states
Developed 34 Wal-Mart stores in Northeast
Redeveloped and developed approximately 15 million s.f. of
retail space
Presently oversees the operations of Lord &
Taylor and Hudson’s Bay Company
(1) John Roche is expected to join the Company as CFO in conjunction with the Transaction.
Note: s.f. denotes square feet.
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Board of Directors
Richard A. Baker, Executive Chairman
Stuart Tanz, CEO and President
Robert C. Baker
Mark Burton
William L. Mack
Lee S. Neibart
Independent Directors
Edward H. Meyer
Ronald W. Tysoe
Vincent S. Tese
Laura H. Pomerantz
Michael J. Indiveri
20
27
46
42
43
30
41
23
33
29
32
Retail / Real Estate
Retail Real Estate
Real Estate
Finance / Real Estate
Private Equity / Real Estate
Private Equity / Real Estate
Retail
Finance / Retail
Legal / Corporate
Retail / Real Estate
Finance
Sector Expertise
Years of Experience
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Investment Opportunity
Investment Opportunity with Proven Strategy
Significant opportunity to acquire retail properties at what we believe are compelling yields and values well below their replacement cost
Build a premier internally-managed equity retail REIT
Capitalize on highly experienced management team led by industry leader
Absence of legacy assets will allow the team to focus attention on growth opportunities
Well-positioned to capitalize quickly on current distressed opportunities given strong liquidity
Transaction represents a cost-effective alternative to a traditional IPO for investors
Strong alignment among stockholders, management team and founders
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Market Opportunity
Very large, broad existing market with highly fragmented ownership
Limited number of large national players able to take advantage of opportunities
According to the International Council of Shopping Centers in 2008, there were:
Over 102,000 shopping centers in the US representing over 7 billion s.f. of gross leasable area (“GLA”)
Total retail space of 14.2 billion s.f. of GLA
Over 1.1 million retail establishments in the US
Compelling demographics including population and income growth to provide long-term support to
retail industry, particularly on the east and west coasts of the US
Constrained new supply given continuing declines in new retail construction
Current credit crunch has created significant opportunities to buy assets from distressed owners
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$0
$50
$100
$150
$200
$250
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
YTD
The onset of the credit crisis has led to a collapse of new CMBS issuance since 2007
Absent a recovery, owners will not be able to refinance upcoming maturities using CMBS
Market conditions are creating opportunities to acquire quality assets from distressed owners
CMBS represents a subset of a bigger refinancing problem for real estate assets
Looming Debt Maturities
Rising CMBS Maturities
Collapse of US CMBS Issuance
Source: Bloomberg as of August 2009.
Source: NAREIT & Trepp.
$0
$20
$40
$60
$80
$100
$120
$140
$160
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018+
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$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
11/08
12/08
1/09
2/09
3/09
4/09
5/09
6/09
7/09
8/09
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
Retail
Multi-Family
Office
Hotel
Other
Industrial
Office
28%
Hotel
9%
Other
8%
Multi-Family
21%
Retail
29%
Industrial
5%
Over $600 billion in CMBS outstanding
Retail represents approximately 30% of
total CMBS outstanding
Over $5.7 billion of retail CMBS is
considered delinquent
CMBS Market to Drive Retail Opportunities
Delinquent Retail CMBS Growth
Current Balance of 60+ Days Delinquent CMBS
CMBS Outstanding by Property Type
CMBS Overview
Source: Bloomberg as of August 2009.
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Strategic Overview
Acquisition Strategy
Focus primarily on unique (not widely marketed) opportunities to acquire assets from distressed,
inadvertent and/or absentee owners
Focus on necessity-based retail properties and portfolios
Community and neighborhood shopping centers
Anchored by national and regional department stores, supermarkets and drugstores
Established metropolitan markets with strong income and population growth
Priced below replacement cost
Capitalize on management team’s extensive network of relationships with retailers, brokers,
institutional owners, banks, private owners, and other real estate operators to generate a consistent
flow of off-market acquisition opportunities
Opportunistically evaluate opportunities to buy retail real estate companies experiencing financial
distress.
distress.
Significant pipeline of portfolios and properties currently under review
Sizable portfolios and individual properties of high quality assets held by distressed owners
Large portfolios of properties and single properties where management believes it can add significant value
Opportunities to acquire properties from real estate rich retailers experiencing liquidity issues
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Superior Origination Capabilities
Senior Management
Relationships
Internal Acquisitions
Staff
Strategic Board
Members
Sourcing
Arrangements
• Retailers
• Brokers
• Institutional Owners
• Real Estate Operators
• Private Owners
• Banks
• Robert Baker – NRDC
• Mark Burton – Abu Dhabi
• William Mack – AREA
• Lee Neibart – AREA
• Ronald Tysoe – CIBC
• Laura Pomerantz – PBS
Realty Advisory
•Experience developing,
acquiring and managing over 36
million s.f. of real estate
• Strategic relations with
retailers, sponsors and
institutions
• Stuart Tanz
• Richard Baker
• Director of Acquisitions
• Financial Analyst
Current Investment
Pipeline of
Approximately
$3 Billion
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Target Eastern and Western States
Focus on target markets with:
Strong population, employment,
and household income growth
(targeting 5 of top 10 markets)
Strong retail sales growth
(targeting 11 of top 15 markets)
Large, fragmented ownership of
retail properties
Historically strict development
restrictions
Capitalize on management’s long-standing track record and breadth of industry contacts on east
and west coast.
East Coast
West Coast
Washington
D.C.
NY Metro
Area
New Jersey
Philadelphia
Northern
California
Southern
California
Washington
Oregon
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Operating Strategy
Enhancing rental revenue and underlying value through hands-on, aggressive management
Pro-actively restructure leases to meet tenants’ needs while improving overall economics
Seek opportunities to improve tenant retention
Make rapid and cost-effective cosmetic and functional improvements
Re-merchandise to provide in demand and complementary goods/services
Re-tenant to achieve optimal tenant mix, stable income, tenant flexibility and rent growth
Monitor expenses and prudently carry out capital expenditures
Management and Leasing Strategy
Our goal is to internalize our property management and leasing operations as the portfolio grows over time to
create a fully integrated real estate operating platform with an efficient cost
structure
As capital is being deployed, the Company will initially partner with a select group of third party property
managers with whom management has established relationships
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Financing Strategy
Maintain a conservative and flexible capital structure
Initially rely on low LTV cost-effective property-level financing
Broaden financing sources to include corporate level financings as a REIT
Warrants to provide additional equity capital upon exercise by holders
Maintain a conservative payout ratio to preserve flexibility to increase dividends over time
Actively evaluating opportunities to establish a line of credit with relationship lenders
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Warrant Overview and Strategy
Restructuring terms of existing warrants for the benefit of the Company
Increase exercise price from $7.50 to $12.00 per share
Extend maturity by three years to October 23, 2014
Increase redemption call price from $14.25 to $18.75 per share ($22.00 for founder warrants)
Following the transaction, there will be 49.4 million warrants outstanding
Public warrants must be exercised for cash representing potential proceeds of $496.8 million
Provide equity capital at over a 20% premium to going-in Trust Value per share
Transaction requires approval of a majority of warrant holders
The Company will evaluate opportunities to acquire warrants to mitigate dilution as well as induce
conversions to generate additional investment capital over time
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Financial Overview
Summary Financial Overview
Transaction
(All amounts in $US millions except per share values)
July 31, 2009
Maximum
Minimum
Investment Held in Trust
$410.1
$410.1
$103.4
Less: Accrued Expenses
(0.5)
(0.5)
(0.5)
Less: Estimated Transaction Expenses
-
(7.0)
(2.9)
$409.6
$402.6
$100.0
Shares Outstanding
(1)
41.4
41.6
10.5
Trust Value per Share
(2)
$9.89
$9.69
$9.48
Market Value per Share
(3)
$9.82
Transaction Value vs. Trust Value
Equivalent IPO Gross Spread / Discount
(4)
2.1%
4.2%
Multiple of Book Value
(5)
1.02
x
1.04
x
Current Market Value vs. Trust Value
Equivalent IPO Gross Spread / Discount
(6)
0.7%
0.7%
Multiple of Book Value
(7)
1.01
x
1.01
x
(1) Shares outstanding following the transaction include 150,000 shares retained by non-founder directors.
(2) Represents Investment Held in Trust, including Investment Held in Trust for the Underwriter, net of expenses, divided by public shares outstanding.
Note that Trust Value per Share is not necessarily indicative of the price at which the Company’s share may trade.
(3) Reflects market price per share of August 26, 2009.
(4) Represents the percentage discount of the Trust Value per Share after the transaction relative to the Trust Value per Share as of July 31, 2009.
(5) Calculated as the ratio of Trust Value per Share as of July 31, 2009 to Trust Value per Share after the Transaction.
(6) Represents the percentage discount of the Market Value per Share relative to the Trust Value per Share as of July 31, 2009.
(7) Calculated as the ratio of Trust Value per Share as of July 31, 2009 to Market Value per Share.
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Select Shopping Center REITs
Dividend
Payout
Equity Mkt.
Enterprise
2010E Price /
Total Debt /
Company Name
Yield
Ratio
(1)
Cap
Value
(2)
FFO
AFFO
Total Mkt. Cap
(3)
Kimco Realty Corporation
1.9%
18.8%
$4,708
$9,394
10.6
x
13.5
x
43.2%
Federal Realty Investment Trust
4.3%
70.2%
3,772
5,508
16.3
18.5
33.4%
Weingarten Realty Investors
5.2%
50.0%
2,359
5,421
11.3
14.4
48.2%
Regency Centers Corporation
5.6%
159.5%
2,656
4,877
13.2
15.9
41.4%
Equity One, Inc.
7.5%
96.8%
1,382
2,464
14.7
17.4
43.9%
Saul Centers, Inc.
4.8%
61.9%
754
1,516
13.2
16.2
40.0%
Acadia Realty Trust
4.7%
75.0%
616
1,309
15.3
17.4
56.5%
Urstadt Biddle Properties Inc.
6.0%
80.0%
290
467
12.6
16.1
23.2%
Mean
5.0%
76.5%
$2,067
$3,870
13.4
x
16.2
x
41.2%
Median
5.0%
72.6%
1,870
3,671
13.2
16.1
42.3%
Source: SNL Financial estimates / financial data
(1)
Reflects quarter ended June 30, 2009 FFO annualized.
(2)
Reflects market value of equity plus market value of preferred, net debt and minority interest.
(3)
Total debt includes borrowings, repurchase agreements, notes, bonds, debentures, ESOP liabilities, and capital leases. Total market capitalization
reflects market value of equity plus total debt, minority interest and market value of preferred.
Note: Reflects closing prices as of
8/26/2009
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Appendix
Board of Directors Biographies
43 years of experience
Founder and Senior
Partner of AREA Property
Partners
Experienced in real estate
investment and ownership,
including acquisitions,
development, finance,
dispositions, leasing and
management
Senior Partner of the Mack
Organization
Non-executive Chairman
of Mack-Cali Realty
Corporation
Chairman of the Solomon
R. Guggenheim
Foundation
William L. Mack
46 years of experience
Chairman and CEO of
National Realty &
Development Corporation
Responsible for managing
the ongoing portfolio
company while providing
strategic planning and
sourcing of new deals
Provides real estate
valuation and re-purposing
expertise to NRDC Equity
Partners
Experienced in real estate
acquisition, construction,
financing and
management
Robert C. Baker
42 years of experience
CIO of Real Estate
Department at Abu Dhabi
Investment Council and
Abu Dhabi Investment
Authority
Former Managing Director
at AIG Global Real Estate
Investment (Europe)
Limited, where he was
responsible for making
investments throughout
Europe
Former CEO of Real Estate
at United Bank of Kuwait
PLC
Former Chairman of RICS
Commercial Property
Panels
Former Chairman of
Investment Property
Forum
Mark Burton
30 years of experience
Senior Partner of AREA
Property Partners
Oversees global day to day
activities of AREA
Property Partners,
including portfolio
company and fund
management, strategic
planning and new
business development
Former Executive Vice
President and Chief
Operating Officer of the
Robert Martin Company
Lee S. Neibart
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Independent Directors
Former Senior Advisor
with Perella Weinberg
Partners LP
Former Vice Chairman,
Chief Financial Officer
and Director of
Federated Department
Stores
Director of Canadian
Imperial Bank of
Commerce (CIBC)
Member of the board of
directors of Scripps
Networks Interactive,
Inc.
Member of the board of
directors of Taubman
Centers, Inc.
Ronald W. Tysoe
Former Chairman and
CEO of Grey Global
Group, a global
advertising agency
Director of the Jim
Pattison Group, a
diversified company
located in Canada
Director of Ethan Allen
Interiors Inc.
Director of National
Cinemedia, LLC, an
operator of digital
theatres
Director of Harman
International
Industries, Inc., a
manufacturer of high-
quality, high-fidelity
audio and electronic
products
Former Director of May
Department Stores
Edward H. Meyer
Former Chairman of
Wireless Cable
International and
Cross Country
Wireless
Director of Bear
Stearns Companies;
Bowne & Co.;
Cablevision Inc.; Mack-
Cali Realty Corp.;
GAMCO Investors Inc.
Former Chief
Executive Officer and
Chairman of the New
York State Urban
Development Corp.
Former Partner in the
law firm of Tese & Tese
Vincent S. Tese
Principal of PBS Realty
Advisors LLC
Former Senior
Managing Director of
Newmark & Company
Real Estate
Former Executive
Managing Director of
S.L. Green
Former Executive Vice
President and Director
of The Leslie Fay
Companies (1993 –
1994), designer,
manufacturer and
marketer of diversified
lines of women's
dresses and
sportswear
Laura H. Pomerantz
CFO of Amalgamated
Bank
Former Executive Vice
President and CFO of
City & Suburban
Federal Savings Bank
Former Senior Vice
President and CFO of
Savings Bank of
Rockland County
Michael J. Indiveri
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Investor Contact
For additional information or to schedule a presentation, please contact:
Mr. Joseph Roos
NRDC Acquisition Corp.
3 Manhanttanville Road
Purchase, NY 10577
(914) 272-8066
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