Lionbridge Issues Open Letter to Alexander's Shareholders

Rhea-AI Summary

Lionbridge Capital has issued an open letter to Alexander's Inc. (ALX) shareholders highlighting the company's significant underperformance and proposing strategies to enhance shareholder value. Lionbridge estimates ALX's Net Asset Value at over $425 per share, significantly higher than its current price. The letter outlines two main strategies: first, to internalize management with a dedicated leadership team focused on growth and capital optimization, and second, to explore a strategic review process, including a potential take-private transaction.

Positive

• Lionbridge estimates ALX's Net Asset Value exceeds $425 per share, indicating substantial upside potential.
• Proposal to optimize capital structure and return excess capital to shareholders could enhance shareholder value.

Negative

• ALX has underperformed its relevant indices for over a decade, raising concerns about its market strategy.
• The lack of a clear shareholder-focused strategy and substandard corporate governance are significant issues flagged by Lionbridge.

• Shares two potential strategies to address ALX's underperformance
  
  
• Looks forward to shareholder feedback and stands ready to work constructively with the Board to find a value-maximizing outcome for shareholders

NEW YORK, July 27, 2022 /PRNewswire/ -- Lionbridge Capital, LP (together with its affiliates, "Lionbridge"), an alternative investment management firm and significant shareholder of Alexander's Inc. ("Alexander's," "ALX" or the "Company") (NYSE: ALX), today 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:

• Internalize management and appoint a dedicated leadership team that will be focused solely on optimizing Alexander's portfolio and accretive growth opportunities; 
  
  
• Optimize capital structure and return excess capital to shareholders; 
  
  
• Refresh Board with appointment of new independent directors; and 
  
  
• Improve investor disclosures and communications.

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 

CONTACT: 

Greg Morillo 
Lionbridge Capital LP 
Email: greg@lionbridgecap.com 
Tel: (212) 300-8003 

View original content:https://www.prnewswire.com/news-releases/lionbridge-issues-open-letter-to-alexanders-shareholders-301594720.html

SOURCE Lionbridge Capital LP

FAQ

What concerns did Lionbridge express regarding ALX's performance?

Lionbridge highlighted ALX's long-term underperformance compared to relevant indices and a lack of a clear, shareholder-focused strategy.

What is Lionbridge's estimated Net Asset Value for ALX?

Lionbridge estimates that ALX's Net Asset Value is conservatively over $425 per share.

What strategies did Lionbridge propose to enhance ALX's value?

Lionbridge suggested internalizing management, optimizing capital structure, refreshing the Board, and improving investor communications.

Is there a potential for ALX to go private?

Yes, Lionbridge mentioned a strategic review process that could include a take-private transaction, with institutional interest potentially available.

When was the open letter by Lionbridge issued to ALX shareholders?

The open letter was issued on July 27, 2022.