(Adds company response, paragraphs 4-6)
By Michael Flaherty
NEW YORK, Jan 29 (Reuters) - The activist investor targeting NorthStar Asset Management Group has nominated six directors to the company’s board, according to a letter reviewed by Reuters, a move that could prompt a proxy fight if the sides fail to reach an agreement.
Land and Buildings, the real estate-focused activist hedge fund run by former Citigroup analyst Jonathan Litt, submitted its slate of six directors just before NorthStar’s Thursday deadline for nominating candidates ahead of its annual meeting.
Activist shareholders often propose directors for a company’s board, but a slate of more than two or three candidates is rare. Litt did not identify the directors in his letter.
Litt’s public campaign against NorthStar came just as the company announced, on Jan. 11, that it had hired Goldman Sachs to seek strategic options.
“NorthStar is disappointed Land and Buildings would pursue a potentially disruptive proxy contest while the Board focuses on its work with Goldman, Sachs & Co ... a process that is well underway,” the company said in a statement.
NorthStar said Land and Buildings has acquired less than 1 percent of its shares.
Land and Buildings previously asked NSAM, which has a market worth of $2.2 billion, to extend its nomination deadline so the two sides could discuss new board candidates, but the company held to its window. Land and Buildings has also said the NorthStar asset management arm and the NorthStar real estate investment trust, which agreed to split up two years ago, should re-combine.
In December 2013, the board of NorthStar Realty Finance Corp (NRF), a REIT that invests in commercial properties, approved the spin off of its asset management business into a publicly-traded entity, now known as NSAM.
NorthStar Realty invests in healthcare facilities, hotels, multifamily homes and other real estate developments across the United States and internationally.
In the letter, addressed to NSAM Executive Chairman David Hamamoto, Litt said he was concerned that four of the five directors on NSAM’s board also serve on NRF’s board. Hamamoto is also the chairman of NRF.
“We expect NSAM management to provide a meaningful update on its strategic review process when NSAM reports earnings in February,” said the letter, to be released on Friday.
In addition to NRF, NSAM manages the assets of NorthStar Realty Europe Corp and performs other asset management responsibilities across the NorthStar real estate platform, according to the company’s website. (Reporting by Michael Flaherty; editing by Muralikumar Anantharaman and David Gregorio)