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Ancora Advisors Quick Thesis On Potbelly's $PBPB

Ancora Advisors LLC is a significant shareholder of Potbelly Corporation ("Potbelly" or "Company"), owning approximately 4% of the outstanding shares. We believe Potbelly has the potential to be a very attractive investment at the current valuation, underpinned by robust store level return on invested capital ("ROIC"), a strong balance sheet, a quality brand and product, and significant growth runway.  However, while the Company targets 25%+ shop level ROIC, it has been unable to translate strong unit level returns to acceptable shareholder returns.

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Land & Buildings Letter To Hudson's Bay

As an approximately 4.3% shareholder of Hudson’s Bay, Land and Buildings has watched over the past few months as the Company publicly sought a merger partner such as Neiman Marcus or Macy’s. As has been thoroughly reported, any transaction of this type would be challenging and complicated. To date, the only result of these efforts has been the stock declining nearly 25% since the deal talks surfaced, and the Company announcing last Thursday that it would be undertaking a massive $350 million restructuring to realign its own business “to get ahead of the changing retail landscape.” 

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FrontFour Letter On ILG And Marriott Vacations Merger

Our conservative analysis below assumes total cost synergies of $150 million, no revenue synergies, assumes only $100mm of synergies included in the leverage calculation and excludes non-recourse securitized debt, a 6% cost of debt financing, $60 million in cash transaction expenses and is derived using current 2018 consensus street estimates for revenue and EBITDA.  As shown in the table below, and assuming the midpoint of the offer range and leverage range, and further taking into account our conservative assumptions as discussed above, a transaction is nearly 20% accretive to Marriott Vacations shareholders based on current 2018 EPS estimates. 

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