By Ilaina Jonas
NEW YORK, April 13 Vornado Realty Trust,
facing criticism from investors over its lackluster share price,
said it is mulling an array of options including selling its
stake in Toys R Us, buying back shares, and even breaking up the
real estate investment trust.
"Everything is on the table," Chairman Steven Roth wrote in
his annual letter to shareholders, which was filed with the U.S.
Securities and Exchange Commission on Friday.
Vornado owns office buildings in New York and Washington,
D.C., as well as retail property and has stakes in other
companies. It also operates a fund business.
Its shares have lagged the benchmark Morgan Stanley REIT
Index and its closest office real estate peers for the past
Among the list of actions the company is considering is
selling non-core assets such as Toys R Us, which Vornado owns
with private equity firm KKR & Co LP and Bain Capital.
It also may reduce its enclosed-mall business and sell some of
its strip centers. It also said it would consider splitting up
"It's what we have been expecting," said Sandler O'Neill
analyst Alexander Goldfarb. "The stock has been an
underperformer. It doesn't have the same sparkle that it used to
have. They want that limelight back, and they know they need to
do something. People don't want talk. They want action."
In a note earlier this week, Goldfarb urged the company to
break up into three segments: office, retail and its fund
business. Collectively, those segments could be worth $90 a
share, he said.
However, Roth said Vornado will "hold for now" its 23.4
million shares in department store JC Penney Co Inc "to
reap the benefit of the company's transformation," under its new
leadership, which includes Chief Executive Ron Johnson, who
created Apple Inc's retail business.
In thin trade after hours, Vornado shares inched up 0.28
percent to $80.16 from its close of $79.94 on the New York Stock
In what may seem like a small step, Vornado will break from
its long-time tradition of not holding quarterly conference
calls. It will hold its first quarterly conference call starting
with in the second quarter, Roth said in his annual letter.
New Jersey-based Vornado also will continue to sell some of
the office and showrooms in its 5.7 million square-foot Mart
"We did try to sell this business as a single division,"
Ross wrote. "We came close with one buyer, but no cigar."
However, it would retain, for now, the 3.5 million
square-foot Chicago Merchandise Mart, he said.