Urges Shareholders to Take No Action on Corvex/Related's Purported
Consent Solicitation
No Record Date Has Been Set and There is No Valid Consent
Solicitation at This Time
NEWTON, Mass. -- (Business Wire)
CommonWealth REIT (NYSE: CWH) today issued an open letter to its
shareholders urging them to take no action on Corvex Management LP and
Related Fund Management, LLC (together, “Corvex/Related”)’s purported
consent solicitation. The company noted that there is no valid consent
solicitation at this time, and no record date has been set by the
CommonWealth Board of Trustees. The full text of the letter is below:
June 17, 2013
Dear Shareholder,
You may have received materials from Corvex Management LP and Related
Fund Management, LLC (together, “Corvex/Related”) purportedly seeking
your written consent to remove without cause
all of the duly elected members of your Board of Trustees.
THE BOARD OF TRUSTEES OF COMMONWEALTH URGES YOU NOT TO TAKE ANY
ACTION AT THIS TIME.
THE BOARD HAS NOT SET A RECORD DATE AND THE CORVEX/RELATED CONSENT
SOLICITATION IS NOT VALID AT THIS TIME.
The validity of the Corvex/Related consent solicitation depends upon a
court or an arbitration panel making a number of findings, including
that certain of CommonWealth's bylaws are invalid and that
CommonWealth's Board may be removed without cause.
WE BELIEVE CORVEX/RELATED ARE MASKING THEIR INTENT TO SEIZE CONTROL
OF COMMONWEALTH WITHOUT PAYING A CONTROL PREMIUM.
Corvex/Related first started accumulating shares of CommonWealth in
January 2013. Since then, Corvex/Related announced several highly
conditional, unfinanced purported “offers” to acquire the Company. In
their latest such “offer,” Corvex/Related offered to acquire the Company
for $24.50 per share, despite that they had previously estimated the
Company’s net asset value at between $35.00 and $44.00 per share. Your
Board, after consultation with its legal and financial advisors and
after meeting with Corvex/Related, carefully considered this purported
“offer” and determined that it was illusory and that the interests of
CommonWealth and its shareholders would best be served by the Company
continuing to implement its business plan. Many weeks have passed since
Corvex/Related first publicly announced their purported desire to
purchase CommonWealth and they have still not provided a concrete, fully
financed offer, let alone an offer at an appropriate premium.
Conveniently, Corvex/Related now claim that they “are not attempting a
hostile takeover.” Yet, they made an ultimatum to the CommonWealth
Board:
(1)negotiate to sell CommonWealth to Corvex/Related;
(2)sell CommonWealth to a third party willing to pay more than
Corvex/Related; or
(3)face a consent solicitation to
remove the entire CommonWealth Board.
In fact, when representatives of CommonWealth and Corvex/Related met,
Corvex/Related advised that no amount of corporate governance changes
would be an acceptable alternative to the three “alternatives” described
above. Given Corvex/Related’s actions, CommonWealth’s Board continues
to believe that Corvex/Related’s primary motivation is to gain control
of the CommonWealth Board without paying a control premium and without
disclosing to shareholders their future plans for CommonWealth.
THE PRINCIPALS OF RELATED AND CORVEX HAVE A POOR TRACK RECORD OF
GOVERNING PUBLIC REAL ESTATE COMPANIES.
Jeff Blau, the principal of Related and CEO of the Related Companies,
previously served as Chairman, CEO and a Trustee of American Mortgage
Acceptance Company ("AMAC"). During Mr. Blau’s tenure at AMAC, AMAC
funded loans to affiliates of the Related Companies which subsequently
defaulted and became worthless. Shortly thereafter, AMAC
ceased operations and filed for bankruptcy. Additionally, Mr.
Blau and Stephen Ross, the Chairman of the Related Companies, served as
Managing Trustees on the board of Centerline Holding Company (f/k/a
Charter Municipal Mortgage Acceptance Company, or "CharterMac"); during
which time, Centerline/CharterMac provided financing to affiliates of
the Related Companies. During Jeff Blau’s and Stephen Ross’s combined
tenure on the Centerline/CharterMac board between 2003 and 2009, the
total returns realized by public shareholders were a LOSS of 97.7%.
Corvex has limited real estate industry experience. Corvex’s Managing
Partner, Keith Meister, and his former employer first made a tender
offer for WCI Communities, Inc., which they later withdrew. Mr. Meister
was then elected to the board of WCI in 2007 following a proxy contest;
and within approximately one year of his joining the WCI board, WCI
was forced into bankruptcy and essentially all WCI shareholder value was
lost.
COMMONWEALTH REMAINS COMMITTED TO EXECUTING ON ITS STRATEGIC PLAN TO
ENHANCE VALUE FOR ALL COMMONWEALTH SHAREHOLDERS.
CommonWealth has made substantial progress in executing its business
plan to focus on the ownership and operation of high quality central
business district (“CBD”) office properties, to divest its suburban
office and industrial properties and other assets, and to repay debt.
Since January 1, 2008, CommonWealth has increased its portfolio
concentration of CBD office properties by acquiring $3.7 billion of
primarily Class A, CBD office properties, principally from distressed
sellers, and selling $1.5 billion of primarily suburban office
properties for significant gains.
Despite Corvex/Related’s claims regarding the Company’s performance,
CommonWealth’s operating results have been competitive with its peer
group. In fact, CommonWealth has been more effective in leasing its
portfolio than many of its peer group, and CommonWealth’s total return
per year has outperformed its peer group and the S&P 500 Index.
If you would like more information about CommonWealth’s historical
performance, activities and business plan, please visit www.cwhreit.com
to view our investor presentations.
Thank you,
THE BOARD OF TRUSTEES OF COMMONWEALTH REIT
If you have any questions, please call Innisfree M&A Incorporated, which
is assisting us, toll-free at 1-877-750-5836.
Additional Information Regarding the Consent Solicitation
CommonWealth REIT (the “Company”), its trustees and certain of its
executive officers and Reit Management & Research LLC and certain of its
directors, officers and employees may be deemed to be participants in
the solicitation of consent revocations from shareholders in connection
with the consent solicitation conducted by Corvex/Related and certain of
their affiliates. On April 1, 2013, the Company filed a revised
preliminary consent revocation statement with the Securities and
Exchange Commission (the “SEC”) in response to the consent solicitation.
The Company will furnish a definitive consent revocation statement to
its shareholders, together with a BLUE consent revocation card, when
they become available. SHAREHOLDERS ARE URGED TO READ THE CONSENT
REVOCATION STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO)
AND ANY OTHER RELEVANT DOCUMENTS THAT THE COMPANY WILL FILE WITH THE SEC
WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. Additional information regarding the identity of these
potential participants and their direct or indirect interests, by share
holdings or otherwise, is set forth in the revised preliminary consent
revocation statement filed with the SEC and other materials to be filed
with the SEC. Shareholders will be able to obtain, free of charge,
copies of the consent revocation statement and any other documents to be
filed by the Company with the SEC in connection with these matters at
the SEC’s website (http://www.sec.gov), at the Company’s website
(http://www.cwhreit.com) or by requesting materials from the firm
assisting the Company in the solicitation of consent revocations,
Innisfree M&A Incorporated, toll-free at 877-750-5836.
Contacts:
INVESTORS
CommonWealth REIT
Carlynn Finn, 617-796-8222
Senior
Manager, Investor Relations
or
Innisfree M & A Incorporated
Larry
Miller /Jennifer Shotwell/Arthur Crozier
212-750-5833
or
MEDIA
CommonWealth
REIT
Timothy A. Bonang, 617-796-8222
Vice President, Investor
Relations
or
Joele Frank, Wilkinson Brimmer Katcher
Andrew
Siegel / Jonathan Keehner
212-355-4449
Source: CommonWealth REIT
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