NEW YORK, March 1, 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 Trustees of
CWH:
To the Board of Trustees:
On February 27, 2013, CommonWealth
REIT ("CWH" or the "Company") announced that it had priced
30,000,000 shares of Common Stock in a public offering (the
"Offering") at $19.00 per
share. On February 28, 2013,
the Issuer announced the underwriters had exercised the
overallotment option on 4,500,000 shares, and on March 1, 2013, the Issuer announced that it had
increased its maximum tender offer amount with respect to
outstanding debt to $650,000,000. In response to these
decisions by you, we are actively exploring litigation to recoup
the value destroyed by the Offering and are willing to use any and
all appropriate legal means to prevent further destruction of
shareholder value.
We find it unconscionable that the Board of Trustees would vote
to issue shares significantly below-market in light of the offer on
the table from a credible buyer at a significant premium. We
agree with CNBC's assessment of the transaction, which they
described as "a real-life poison pill" and their mocking assessment
of your decision to pursue the Offering in light of the bid-
"amazing- amazing that they did this".[1]
We demand the following steps be immediately taken by the Board
of Trustees:
- Form an Independent Committee with Independent Counsel and an
Independent Financial Advisor to immediately pursue strategic
alternatives;
- Cease all asset acquisition and disposition activity until the
conclusion of the independent strategic review;
- Cease all equity offerings in CWH or indirectly through its
majority owned subsidiary, Select Income REIT;
- Do not seek to amend, in any way more favorable to REIT
Management and Research LLC ("RMR"), the existing management
agreement between CWH and RMR; and
- Authorize, if you have not already done so, the Independent
Trustees to retain their own independent counsel. Given the
internal conflicts of interest we currently perceive at the Board
level, we believe that CWH counsel cannot adequately represent the
Independent Trustees and therefore that the Independent Trustees
cannot adequately represent shareholders.
Luxor Capital Group, LP
Media Contact:
Norris Nissim
212-763-8041
General Counsel of Luxor Capital Group, LP
[1] CNBC, The Faber Report, February 28,
2013.
SOURCE Luxor Capital Group, LP