Additional Proxy Soliciting Materials (definitive) (defa14a)
31 Maio 2013 - 10:32AM
Edgar (US Regulatory)
UNITED STATES
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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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SCHEDULE 14A
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Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under §240.14a-12
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CommonWealth REIT
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check the appropriate box):
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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Proposed maximum aggregate value of transaction:
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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Amount Previously Paid:
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Form, Schedule or Registration Statement No.:
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Date Filed:
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On May 31, 2013, CommonWealth REIT (the Company), made the following
supplemental investor presentation available to the Companys shareholders on
the Companys website, www.cwhreit.com, in response to the consent solicitation
by Corvex Management LP and Related Fund Management, LLC.
* * * * *
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Supplemental
Investor Presentation May 2013 111 East Wacker Drive & 233 North Michigan
Avenue Chicago, IL Mellon Bank Center 1735 Market Street Philadelphia, PA
Chase Tower 111 Monument Circle Indianapolis, IN CommonWealth REIT
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CommonWealth
REIT Corvex Management LP and Related Fund Management, LLC
(Corvex/Related) have made numerous false and misleading statements
regarding CommonWealth REIT (CWH) and Reit Management & Research LLC
(RMR). The truth is: 1. RMR (with over 800 employees) provides CWH with a
nationwide, fully integrated real estate management platform at below
industry average costs, 2. CWH directly benefits from the economies of scale
that RMR passes through to its managed REITs in the form of lower operating
costs, 3. Under the management of RMR, CWHs operating results have been
competitive with its peer group, 4. CWH has been more effective in leasing
its portfolio than its peers, 5. CWHs total returns per year have often
outperformed its peer group and the S&P 500 Index, and 6. REITs managed
by RMR trade at or above consensus net asset value per share. Dont be
fooled: Corvex/Related are not champions of corporate governance; they are
attempting a hostile takeover of CWH. Corvex/Relateds track record of
running public real estate companies has caused substantial losses for
shareholders. The Corvex/Related proposal to remove the entire CWH Board
may cause material losses to CWH and CWH shareholders. Setting the record
straight. 2
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CommonWealth
REIT 0.66% 0.67% 0.76% 0.69% CWH CWH (Excl. SIR) Primary Peers Secondary
Peers 5.1% 4.9% 6.3% 7.3% CWH CWH (Excl. SIR) Primary Peers Secondary RMR
(with over 800 employees) provides CWH with a nationwide, fully integrated
real estate management platform at below industry average costs. 3 CWHs
G&A is lower than the average G&A for comparable office REITs. 8.7%
8.8% 9.8% 10.6% CWH (Excl. SIR) Primary Peers G&A (% of Revenues) G&A
(% of NOI) G&A (% of Gross Real Estate Assets) Lower Lower Lower Source:
Company filings for the 12-month period ended December 31, 2012. Note:
Includes REITs in the office sector with total enterprise value at 12/31/2012
between $4 billion and $10 billion. Primary Peers include BDN, CLI, LRY, DRE,
HIW and PDM. Secondary Peers include ARE, BMR, DEI, KRC and OFC. CWH CWH
(Excl. SIR) Primary Peers Average Secondary Peers Average CWH CWH (Excl. SIR)
Primary Peers Average Secondary Peers Average CWH CWH (Excl. SIR) Primary
Peers Average Secondary Average
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CommonWealth
REIT Case Study: Electricity Costs. In 2012, CWH spent approximately $62
million on electricity costs at its wholly owned properties.(1) By
leveraging the electricity usage for all RMR managed properties, RMR was able
to achieve electricity cost savings at CWHs wholly owned properties in 2012
which were approximately 7.0% less than the national average, creating
implied savings of $4.3 million in 2012.(2) Case Study: Internal Audit Costs.
By spreading RMRs internal audit costs across all RMR managed public
companies, CWHs internal audit costs are significantly below the industry
average. CWH has never reported a material weakness in its internal
controls over financial reporting since the Sarbanes-Oxley Act went into
effect in 2004. CWH directly benefits from the economies of scale that RMR
passes through to its managed REITs in the form of lower operating costs. 4
Without the benefit of RMRs economies of scale, CWHs operating costs may
increase substantially. (1) Excludes electricity costs directly paid by
tenants and includes some electricity costs that were later reimbursed by
tenants. (2) Based on CWHs actual cost of $0.0945/kWh versus the national
average of $0.1011/kWh (Source: U.S. Energy Information Administration,
Electric Power Monthly, Issues: March 2013-February 2013, Table ES1.A).
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CommonWealth
REIT Under the management of RMR, CWHs operating results have been
competitive with its peer group. 5 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2
2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012
Q4 2012 Q1 2013 Average Brandywine (BDN)(3) 5.6% -1.0% -0.5% -10.8% -6.2%
-2.3% -7.0% -5.1% -5.3% -6.9% -1.8% 0.2% -0.3% 2.4% 0.9% 4.5% 6.3% -1.6%
Mack-Cali (CLI)(1) -0.3% 0.7% 2.3% -2.0% -4.0% -6.5% -7.5% -7.1% -8.0% -4.4%
3.7% -3.2% 4.8% -0.2% -6.2% -5.0% -10.2% -3.1% Liberty (LRY)(1) 1.8% 0.5%
0.4% -1.4% -2.3% -1.8% -2.1% -2.3% 3.4% 2.8% 0.7% 3.6% 0.5% -0.6% 0.3% -0.2%
0.3% 0.2% Duke (DRE)(2) -0.4% -1.6% -5.6% 5.9% -2.5% -1.6% 1.5% 5.0% 0.0%
0.5% 1.2% 4.7% 4.7% 3.4% 2.0% 1.6% 2.6% 1.2% Highwoods (HIW)(3) -4.5% -1.8%
-3.2% -2.8% -0.4% -4.2% -6.6% -0.8% -4.3% 1.5% 3.7% -3.1% 5.4% 1.8% 2.7% 4.9%
3.0% -0.5% Parkway (PKY)(2) -4.5% -1.3% -7.1% -1.7% 17.8% -7.1% -3.2% -0.2%
-17.5% 5.5% -11.8% -3.0% -14.2% -6.2% 11.2% 3.0% 11.3% -1.7% Piedmont
(PDM)(3) - - - - - - -6.2% -2.6% -1.9% 1.7% -2.7% -1.3% -4.1% -7.5% -8.5%
-9.0% -9.0% -0.3% 2.2% -0.1% -3.5% Average -0.4% -0.7% -2.3% -2.7% 0.0% -3.6%
-3.3% -1.9% -4.7% -0.7% -1.7% -1.3% -1.2% -1.2% 1.5% 1.6% 1.9% -1.3%
CommonWealth REIT (CWH)(3)(4) 0.5% 3.7% -0.8% -0.1% -6.4% -6.9% -4.0% 1.6%
-7.1% -4.6% -1.3% -5.0% 6.5% -0.6% -1.8% -4.5% -3.0% -2.0% CWH Outperformance
. . . . . . . . % Change in Same Property Cash NOI Despite the efforts
required to reposition its portfolio into CBD office properties, CWH has
generated higher same property cash NOI growth than its peer group about half
of the time since 1/1/2009. Source: Company filings with the SEC. (1)
Excludes straight line rent adjustments. (2) Excludes straight line rent adjustments
and market rate amortization. (3) Excludes straight line rent adjustments,
market rate amortization and termination fees. (4) Throughout all periods,
excludes 94 properties classified in discontinued operations at 12/31/2012.
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CommonWealth
REIT CWH has been more effective in leasing its portfolio than many of its
peers. 6 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1
2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Average
Brandywine (BDN) -1.6% -4.6% -4.9% -3.9% -8.9% -7.5% -10.1% -8.1% -6.8% -7.8%
-6.1% -6.4% -14.2% -6.8% 0.0% -4.1% 3.4% -5.8% Mack-Cali (CLI) - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - Liberty (LRY) - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Duke Realty
(DRE) 3.8% 3.1% -0.8% 0.8% -1.4% -9.5% -2.9% -5.9% -5.0% -1.6% 1.0% 2.7% 1.8%
0.7% 1.0% 2.1% 1.9% -0.5% Highwoods (HIW) -4.9% -4.2% -7.0% -14.7% -12.3%
-13.7% -10.7% -10.2% -11.0% -8.1% -11.0% -7.4% -7.9% -8.8% -8.5% -7.7% -11.9%
-9.4% Parkway (PKY) - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - Piedmont (PDM) - - - - - - -3.3% -21.0% -21.6% -23.9% -19.5%
8.1% 3.0% -14.2% -7.1% -4.5% -16.1% -16.5% -2.3% -18.7% -11.3% Average -0.9%
-1.9% -4.2% -5.3% -10.9% -13.1% -11.9% -10.9% -3.7% -3.6% -7.6% -4.6% -6.2%
-7.8% -6.0% -3.0% -6.3% -6.7% CommonWealth REIT (CWH) 0.0% -7.0% -5.0% 5.0%
-2.0% -11.0% -2.0% -12.0% 5.0% -3.0% -3.0% -4.0% -12.0% -7.0% -4.0% -2.0%
-1.0% -3.8% CWH Outperformance . . . . . . . . . . . . . . %
Rollup/(Rolldown) in Cash Rents Leasing Capital Committed per Square Foot per
Lease Year Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1
2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Average
Brandywine (BDN) $2.31 $2.62 $2.20 $1.82 $2.24 $2.26 $2.09 $2.27 $2.29 $2.94
$2.23 $3.05 $2.85 $3.68 $2.04 $2.10 $2.21 $2.42 Mack-Cali (CLI) $2.99 $3.11
$2.40 $3.69 $3.00 $2.30 $4.28 $3.75 $4.23 $4.02 $3.40 $3.33 $3.85 $3.10 $3.03
$4.11 $3.30 $3.41 Liberty (LRY) $1.78 $0.89 $1.14 $0.95 $1.86 $1.08 $0.90
$1.60 $1.65 $1.43 $1.14 $0.98 $1.42 $1.00 $1.42 $0.88 $0.79 $1.23 Duke Realty
(DRE) $0.73 $0.87 $1.07 $0.98 $0.80 $0.69 $1.43 $0.91 $0.87 $0.98 $1.22 $1.02
$0.80 $1.04 $0.57 $0.63 $0.81 $0.91 Highwoods (HIW) $1.82 $1.25 $2.17 $1.55
$2.36 $1.83 $2.37 $1.74 $2.22 $1.92 $2.75 $2.34 $1.85 $2.29 $3.29 $2.78 $2.81
$2.20 Parkway (PKY) $2.96 $3.07 $3.34 $4.89 $1.32 $3.02 $2.86 $3.10 $3.26
$4.01 $3.94 $4.31 $4.15 $2.89 $3.30 $4.91 $2.87 $3.42 Piedmont (PDM) - - - -
- - - - $2.00 - - - - - - $5.82 $2.87 $5.76 $6.14 $3.15 $5.49 $5.96 $5.04
$2.91 $4.51 Average $2.10 $1.97 $2.05 $2.31 $1.94 $1.86 $2.32 $2.23 $2.91
$2.60 $2.92 $3.02 $2.58 $2.78 $2.80 $2.92 $2.24 $2.59 CommonWealth REIT (CWH)
$1.42 $1.72 $1.37 $1.94 $1.76 $1.85 $2.25 $1.41 $1.79 $2.53 $1.86 $3.56 $3.13
$3.33 $2.18 $1.94 $2.01 $2.12 CWH Outperformance . . . . . . . . . . . . . .
. Despite the difficulties of managing a portfolio repositioning into CBD
office properties, CWH has completed 27.5 million square feet of leasing
activity since 1/1/2009. Source: Company filings with the SEC.
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CommonWealth
REIT Since CWH completed its spin-off to shareholders of its senior living
properties, CWH has outperformed its peer group about half the time. CWHs
total returns per year have often outperformed its peer group and the S&P
500 Index. 7 Since CWHs IPO in 1986, CWH outperformed the S&P 500
Index about half the time. Year CWH Peer Group(1) CWH Outperformance 2000
-3.9% 23.7% 2001 25.9% 13.9% . 2002 4.8% 8.7% 2003 33.8% 31.9% . 2004 37.7%
19.1% . 2005 -13.5% 0.9% 2006 30.7% 30.6% . 2007 -33.6% -31.7% 2008 -49.9%
-31.8% 2009 118.0% 40.9% . 2010 4.0% 1.6% . 2011 -29.0% -11.0% 2012 4.9%
22.7% Per Year Average 10.0% 9.2% . Source: SNL Financial. (1) Peer group
includes BDN, CLI, LRY, DRE, HIW, PKY and PDM. Year CWH S&P 500 Index CWH
Outperformance 1987 -5.4% 2.0% 1988 21.7% 16.6% . 1989 28.7% 31.7% 1990 -1.1%
-3.6% . 1991 92.6% 30.5% . 1992 -4.4% 7.6% 1993 31.0% 10.1% . 1994 -0.9% 1.3%
1995 32.9% 37.6% 1996 28.6% 23.0% . 1997 12.5% 33.4% 1998 -24.4% 28.6% 1999
-17.4% 21.0% 2000 -3.9% -9.1% . 2001 25.9% -11.9% . 2002 4.8% -22.1% . 2003
33.8% 28.7% . 2004 37.7% 10.9% . 2005 -13.5% 4.9% 2006 30.7% 15.8% . 2007
-33.6% 5.5% 2008 -49.9% -37.0% 2009 118.0% 26.5% . 2010 4.0% 15.1% 2011
-29.0% 2.1% 2012 4.9% 16.0% Per Year Average 12.5% 11.0% . Total Return Per
Year Total Return Per Year
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CommonWealth
REIT REITs managed by RMR trade at or above consensus net asset value (NAV)
per share. 8 (1) Source: SNL Financial as of 4/30/2013. Government Properties
Income Trust Stock Price $26.05 Consensus NAV per share $24.18 Stock Price
Premium/(Discount) to NAV 7.7% Hospitality Properties Trust Stock Price
$29.41 Consensus NAV per share $26.00 Stock Price Premium/(Discount) to NAV
13.1% Senior Housing Properties Trust Stock Price $28.43 Consensus NAV per
share $23.59 Stock Price Premium/(Discount) to NAV 20.5% Because CWH has been
repositioning its portfolio into CBD office properties since 2008, CWHs
share price has recently been below its true value.
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CommonWealth
REIT In a letter to CWH dated March 28, 2013, Corvex/Related offered CWHs
Board of Trustees these choices: 1. Sell CWH at a price they admit is well
below CWHs true value in order to allow Corvex/Related to realize short term
profits, or 2. Face a consent solicitation to remove the entire Board based
on alleged governance issues. This same letter made a purported offer to
purchase CWH (subject to diligence and financing) for a price per share that
Corvex/Related admit is well below CWHs true value. Since then,
Corvex/Related have publicly identified a new CEO for CWH and a new third
party property manager. . Corvex/Related have not disclosed who they will
nominate to the Board. . Corvex/Related have not disclosed the compensation
for their proposed CEO or third party property manager, but it may exceed
RMRs costs by a significant amount. Dont be fooled: Corvex/Related are not
champions of corporate governance; they are attempting a hostile takeover of
CWH. 9
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CommonWealth REIT
American Mortgage Acceptance Company (AMAC) Jeff Blau (CEO of the Related
Companies) previously simultaneously served as an officer of the Related
Companies and as Chairman, CEO and Trustee of AMAC, a publicly owned REIT
that made mortgage loans. AMAC funded loans to properties owned or developed
by affiliates of Related, including large loans to projects in the areas of
Aspen, CO and Phoenix, AZ that subsequently defaulted and became worthless.
Shortly thereafter, AMAC ceased operations and filed for bankruptcy.
Centerline Holding Company (f/k/a Charter Municipal Mortgage Acceptance Co.,
or CharterMac) Jeff Blau and Stephen Ross (Chairman of the Related
Companies) both served on the Board of Centerline from 2003 (after principals
of Related were paid $338 million by Centerline to internalize management)
until their departure from the Board in 2009. Centerline is a real estate
finance company which also provided financing directly and indirectly to
affiliates of Related. During Jeff Blaus and Stephen Rosss combined tenure
on the Board of Centerline, the total returns realized by public shareholders
were a LOSS of approximately 97.7%. WCI Communities, Inc. (WCI) Keith
Meister (Managing Partner of Corvex) and his former employer acquired a 14.6%
ownership position in WCI in January 2007. WCI was a publicly owned real
estate development company. In public filings, Keith Meister and his
associates criticized WCI management and stated that their goal was to change
management and enhance shareholder value. In March 2007, Keith Meister and
his associates launched a tender offer for WCI at $22.00 per share. The
tender offer was subsequently withdrawn and Keith Meister and his associates
began a proxy contest for control of WCI. By August 2007, Keith Meister and
his associates were elected to the WCI Board and eventually appear to have
assumed effective control of WCI. Within about one year after Keith Meister
was elected to the WCI Board, WCI filed for bankruptcy in 2008.
Corvex/Relateds track record of running public real estate companies has
caused substantial losses for shareholders. 10 Corvex/Related appear to be
using corporate governance as a Trojan horse to rally support for their
efforts despite their own bad track records of managing publicly traded real
estate companies.
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CommonWealth
REIT Even if all of Corvex/Relateds legal arguments are correct, it will
likely take approximately 60-90 days to arrange for a new Board to be
elected, and it is unclear if CWH shares will continue to satisfy standards
for trading on the NYSE while there is no Board in place. . It is unclear who
can prepare, authorize or sign public company reports while there is no Board
in office. . Lenders may exercise change of control and default rights. .
Preferred shareholders may exercise highly dilutive conversion rights into
common shares. Corvex/Related seem oblivious to the adverse consequences
which will likely result from removal of the entire CWH Board. . Ongoing
lease negotiations and capex projects will likely be disrupted. . Competing
landlords will undoubtedly seek advantages. Corvex/Related have proposed a
new CEO and a new third party property manager to operate CWH in place of
RMR. . It is unclear how new officers and a new property manager may be appointed
before a new Board is installed. . It is unclear what these new managers will
cost; RMRs management results in G&A costs below industry averages. The
Corvex/Related proposal to remove the entire CWH Board may cause material
losses to CWH and CWH shareholders. 11
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CommonWealth
REIT Since the recent recession, it has become increasingly apparent to CWH
that CBD office properties are likely to perform better than suburban office
properties. . Since Q1 2009, average occupancy for CWHs CBD office
properties has been 87.8% at quarter end versus average occupancy of 81.2% at
quarter end for CWHs suburban office properties during the same period. .
Since Q1 2009, average change in same property GAAP NOI for CWHs CBD office
properties has been 0.8% per quarter versus average change in GAAP NOI of
-5.8% per quarter for CWHs suburban office properties. In just over five
years, CWH has doubled the size of its CBD office portfolio to represent
60.4% of wholly owned properties GAAP NOI in Q1 2013 from 29.2% in Q4 2007.
. Since 1/1/2008, CWH has sold $1.5 billion of primarily suburban office
properties with approximately 9 million square feet. . Through carve-out
IPOs of GOV and SIR, CWH received $650 million of combined proceeds and
divested primarily suburban office and industrial properties. . CWH used the
proceeds from divestments to purchase primarily Class A CBD office
properties, many of which were acquired from distressed sellers. Since 2008,
CWH has been implementing a business plan to become primarily a nationwide
CBD office REIT. 12 Corvex/Related are attempting to force a sale of CWH
before the full value of the business plan may be realized by all CWH
shareholders.
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CommonWealth
REIT Corvex/Related have made numerous false and misleading statements
regarding CWH and RMR. . Contrary to these allegations, RMR provides CWH with
superior management at below average costs. Dont be fooled: Corvex/Related
are not champions of corporate governance; they are attempting a hostile
takeover of CWH. Corvex/Relateds track record of running public real
estate companies has caused substantial losses for shareholders. The
Corvex/Related proposal to remove the entire CWH board may cause material
losses to CWH and CWH shareholders. Since 2008, CWH has been implementing a
business plan to become primarily a nationwide CBD office REIT. .
Corvex/Related are attempting to force a sale of CWH before the full value of
the business plan may be realized by all CWH shareholders. Conclusion. 13 The
Board and management of CWH believe that the best way to realize the full
value of CWH for all shareholders is to complete the current business plan,
which includes divesting non-core assets and repositioning the portfolio into
high quality CBD office properties.
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CommonWealth
REIT CommonWealth REIT, 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
being 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. CWH 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 CWH 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 in connection with the consent
solicitation. Shareholders will be able to obtain, free of charge, copies of
the consent revocation statement and any other documents to be filed by CWH
with the SEC in connection with the consent solicitation at the SECs website
(http://www.sec.gov) at CWHs website (http://cwhreit.com) or by requesting
materials from the firm assisting CWH in the solicitation of consent
revocations, Innisfree M&A Incorporated, toll free at 1-877-750-5836.
This material is being distributed in response to a consent solicitation by
Corvex Management LP and Related Fund Management, LLC. No record date has
been set by CWHs Board to determine which shareholders may be entitled to
participate in that consent solicitation; shareholders are urged to take no
action with regard to the consent solicitation materials being distributed by
Corvex/Related unless and until Corvex/Relateds eligibility to solicit
consents is determined and a record date is set. 14
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CommonWealth
REIT THIS PRESENTATION CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE MEANING
OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER SECURITIES
LAWS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON CWHS CURRENT
EXPECTATIONS BUT THEY ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR FOR VARIOUS
REASONS, INCLUDING SOME REASONS BEYOND CWHS CONTROL. FOR EXAMPLE: THIS
PRESENTATION DESCRIBES CWHS CURRENT BUSINESS PLAN TO FOCUS UPON OWNING HIGH
QUALITY CBD OFFICE PROPERTIES AND STATES THAT THE POSITIVE RESULTS OF THIS
PLAN ARE BEING REALIZED AND WILL BE REALIZED IN THE FUTURE. THE IMPLICATION
OF THESE STATEMENTS IS THAT CWH MAY SUCCESSFULLY COMPLETE ITS BUSINESS PLAN
AND, AS A RESULT, CWH AND CWH SHAREHOLDERS WILL REALIZE INCREASING VALUE AND
CWHS OPERATING RESULTS WILL IMPROVE. MANY ELEMENTS OF CWHS BUSINESS PLAN
REQUIRE THE PARTICIPATION OF THIRD PARTIES WHO ARE BEYOND CWHS CONTROL:
DIVESTING NON-CORE PROPERTIES AND OTHER ASSETS REQUIRES FINDING BUYERS FOR
THESE PROPERTIES AND ASSETS AT ACCEPTABLE PRICES; CONCENTRATING INVESTMENTS
IN CBD OFFICE PROPERTIES MAY REQUIRE THAT CWH LOCATE ADDITIONAL CBD
PROPERTIES WHICH ARE AVAILABLE FOR SALE AT REASONABLE PRICES; ETC. ALSO,
MARKET CONDITIONS BEYOND CWHS CONTROL AND UNRELATED TO CWHS ACTIVITIES MAY
ADVERSELY AFFECT THE VALUE CWH AND ITS SHAREHOLDERS MAY REALIZE IN THE
FUTURE, AS WELL AS CWHS FUTURE OPERATING RESULTS. THE DECISION OF CWHS
BOARD TO CONTINUE ITS BUSINESS PLAN IS BASED UPON THE BUSINESS JUDGMENT OF
CWHS BOARD, BUT BUSINESS JUDGMENTS MAY BE MISTAKEN. CWH BELIEVES THAT NO
RECORD DATE HAS BEEN SET TO DETERMINE WHICH SHAREHOLDERS ARE ENTITLED TO
PARTICIPATE IN THE CONSENT SOLICITATION BY CORVEX/RELATED AND THAT NO COURT
OR ARBITRATION PANEL HAS RULED THAT CORVEX/RELATED ARE ELIGIBLE TO SEEK SUCH
CONSENTS. THE IMPLICATION OF THESE STATEMENTS IS THAT THE CONSENTS BEING
SOLICITED BY CORVEX/RELATED WILL HAVE NO VALIDITY OR EFFECT. HOWEVER,
CORVEX/RELATED HAVE STATED THAT THEY BELIEVE THE RECORD DATE FOR THEIR
CONSENT SOLICITATION IS THE CLOSE OF BUSINESS ON MONDAY, APRIL 22, 2013, AND
THEY HAVE COMMENCED LITIGATION WHICH QUESTIONS THE VALIDITY OF CERTAIN
PROVISIONS OF CWHS BYLAWS RELEVANT TO THEIR CONSENT SOLICITATION. THIS
LITIGATION WAS DIRECTED TO ARBITRATION ON MAY 8, 2013. THE RESULTS OF LEGAL
PROCEEDINGS ARE DIFFICULT TO PREDICT AND CWH CANNOT GUARANTEE THAT ITS LEGAL
CONCLUSIONS REGARDING THE VALIDITY OF THE CORVEX/RELATED CONSENT SOLICITATION
WILL BE UPHELD OR WHAT THE RESULTS OF THE PENDING LEGAL PROCEEDINGS MAY BE.
FOR THESE REASONS, AMONG OTHERS, INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE
RELIANCE UPON FORWARD LOOKING STATEMENTS IN THIS PRESENTATION. EXCEPT AS MAY
BE REQUIRED BY APPLICABLE LAW, CWH DOES NOT INTEND TO UPDATE THE FORWARD
LOOKING STATEMENTS IN THIS PRESENTATION AS A RESULT OF NEW INFORMATION WHICH
MAY COME TO ITS ATTENTION. Warning regarding forward looking statements. 15
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Supplemental
Investor Presentation May 2013 111 East Wacker Drive & 233 North Michigan
Avenue Chicago, IL Mellon Bank Center 1735 Market Street Philadelphia, PA
Chase Tower 111 Monument Circle Indianapolis, IN CommonWealth REIT
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