New York REIT Inc. shares had their biggest drop since they began trading more than two years ago after analysts questioned whether the planned sale of the company to closely held JBG Cos. is in the best interest of investors.
“The jury is out and New York REIT’s board owes its shareholders a lot more transparency quantitatively why this transaction is better than all viable alternatives in the short, medium and long term,” Sheila McGrath, an Evercore ISI analyst, wrote in a note late Wednesday, after the deal was announced and JBG and New York REIT executives held a conference call. The board needs to disclose how their stockholders are “being compensated over and above the net asset value for its public shell.”
New York REIT, which has been under pressure to raise its shareholder value, dropped 7.6 percent to $9.05 at 11:05 a.m., after falling more than 10 percent earlier this morning. That was the biggest intraday decline since the company started trading publicly in April 2014.