NEW YORK, Feb. 26, 2013 /PRNewswire/ -- Luxor Capital
Group, LP, a New York based
investment manager ("Luxor"), beneficially owns and controls in
excess of 6.7 million common shares of CommonWealth REIT (NYSE:
CWH), or approximately 8.0% of the common shares outstanding.
Luxor is releasing the following open letter to the Independent
Trustees of CWH:
To the Independent Members of the Board of Trustees:
We write to express our strong support for the 13D filing made
on February 26, 2013 by Corvex
Management, LP ("Corvex") and Related Fund Management
("Related"). We concur with the authors that there exists a
substantial discount between the fair market, net asset value of
CommonWealth REIT ("CWH" or the "Company") and the current trading
price of the Company's listed stock. This valuation gap
exists, in our opinion, due to conflicted management and
persistently poor asset allocation decisions by the Board of
Trustees, none greater than the recently-proposed 27 million common
share offering (the "Offering"). We believe the destruction
of shareholder wealth over a period of years is a direct result of
an asset aggregating strategy that is the product of competing
incentives between shareholders and the external manager, REIT
Management and Research LLC ("RMR"). We join Corvex and
Related in demanding you cancel the ill-advised Offering and debt
repurchase, and we demand you exercise your fiduciary duty to all
shareholders and form an Independent Special Committee with an
Independent Financial Advisor and Independent Counsel in order to
explore the full range of strategic alternatives.
Luxor Capital Group and its affiliates collectively control in
excess of 6.7 million shares of CWH, representing greater than 8%
of the current common shares outstanding. We would have liked
to address our concerns regarding the RMR and CWH conflicts
directly with you in a private, less hostile forum, but our request
to meet with the Independent Trustees was denied on December 28, 2012 by the Company. We would
have preferred to discuss our concerns regarding the Offering with
management, but we were denied access to meetings by the
underwriters of the proposed Offering at the behest of the
Company. We are one of your three largest shareholders, yet
management saw to it that we were excluded from a group lunch for
the Offering. It seems to us that any shareholder with the
opinion that a series of strategic decisions have benefitted RMR to
the detriment of CWH is deliberately and actively ignored.
You have now publicly heard that at least 18% of your
shareholders do not support the Offering, and we believe that the
number opposing it is actually much higher. There is
publicly-disclosed interest from credible counterparties to acquire
the Company. We implore you to heed the advice of the owners
of CWH and cancel this unnecessary and highly dilutive Offering and
immediately form an Independent Committee. In the event
you fail to cancel the Offering and pursue an independent strategic
review, we reserve our right to hire our own Independent Advisor,
share the results of that review with all shareholders and, if you
will not heed the voice of the largest owners of the Company,
pursue legal actions against you and the Non-Independent
Trustees.
Media Contact:
Norris Nissim
212-763-8041
General Counsel of Luxor Capital Partners, LP
SOURCE Luxor Capital Group, LP