Lionbridge Capital, LP (together with its affiliates, “Lionbridge”), an alternative investment management firm and significant shareholder of Alexander’s Inc. issued an open letter to Alexander’s shareholders outlining its views and concerns regarding the current state of the Company’s affairs.
Lionbridge has been engaged in a private dialogue with the board of directors in effort to address the issues hindering the stock performance. Today, it is publicly sharing its ideas in order to facilitate a broader discussion regarding the best path forward for ALX and looks forward to receiving feedback from shareholders on its ideas.
According to Lionbridge’s letter, Alexander’s has significantly underperformed its relevant indices for over a decade, with material underperformance prior to the coronavirus pandemic as well. Based on its extensive diligence on Alexander’s assets, Lionbridge estimates the Company’s Net Asset Value is conservatively over $425 per share, 80% greater than the current price, and attributes ALX’s persistent low market valuation to (i) the lack of a clear, shareholder-focused, value-creating strategy, (ii) an overcapitalized balance sheet, (iii) substandard corporate governance, and (iv) a nonexistent investor relations program.
In its letter, Lionbridge suggests two potential strategies that it believes will maximize value for shareholders and that the Company should actively explore. One potential pathway is the implementation of a multi-step plan, as detailed in the letter, which includes the following concrete steps:
According to the letter, another potential pathway is for the Company to commence a strategic review process, including a possible take-private transaction. The letter further provides that Lionbridge believes it has identified interest from an institutional investor that has indicated it is willing to purchase ALX outright at a significant premium to the current trading price or to participate alongside Vornado in a squeeze-out merger. If conducted properly and transparently, Lionbridge believes a strategic review process could attract additional qualified bidders.
The full text of the letter can be viewed at the following link: Letter to ALX shareholders
Lionbridge Capital LP
Tel: (212) 300-8003