Feb 16 (Reuters) - Cedar Realty Trust Inc said on Friday it had reached a settlement agreement with Snow Park Capital Partners LP, bringing an end to the activist hedge fund's campaign against the retail-focused real estate investment trust (REIT).
The agreement, which requires Cedar to select one new independent board director in exchange for Snow Park dropping its shareholder activist campaign, gives the latter relatively little influence to push the company to explore a sale or other strategic alternatives.
Snow Park will consult with Cedar on the selection of the new director, but must ultimately support the candidate that Cedar chooses in the company's next annual general meeting, according to the terms of the settlement.
The new Cedar director will replace Paul Kirk, who was previously a Senator from Massachusetts. Kirk said he would retire from the board earlier this week.
Snow Park also said on Friday it was satisfied with the company's internal investigation of sexual harassment allegations against chief executive officer, Bruce Schanzer.
"Based on information provided to us by Cedar regarding the allegations against Bruce Schanzer and other members of the management team, I believe that the board thoroughly investigated the claims and am comfortable with its findings that the allegations are without merit," said Jeffrey Pierce, managing partner at Snow Park.
Reuters first reported in September that Snow Park had set its sights on Cedar Realty.
The following month, Snow Park sent a letter to Cedar urging it to explore strategic alternatives, including a sale.
Snow Park said Cedar had already received several expressions of interest from potential buyers, and that its shares were trading significantly below where the company would be valued in a potential sale.
In November, Cedar said it rejected an unsolicited offer from retail property owner Wheeler Real Estate Investment Trust Inc, citing concerns about Wheeler's size, performance and debt levels, among other things.
Under new management since 2011, Cedar has been shifting out of non-core retail assets such as shopping malls to focus on grocery anchored strip malls.
As many prominent retailers went bankrupt during the sector’s downturn over the past year and recent expectations of faster hikes in U.S. interest rates weighed on REIT valuations, Cedar’s stock has fallen from highs of more than $8 in mid-2016 to around $4 per share. (Reporting by Carl O'Donnell in New York; Editing by Bernadette Baum)