CommonWealth REIT Comments on Results of the Corvex/Related Purported Consent Solicitation
24 Junho 2013 - 7:30AM
Business Wire
CommonWealth REIT (NYSE: CWH) today commented upon the results
of a purported consent solicitation by Corvex Management LP
(“Corvex”) and Related Fund Management, LLC (“Related” and together
with Corvex, “Corvex/Related”):
On April 12, 2013 Corvex/Related wrote to CWH demanding a record
date for a consent solicitation to remove the entire CWH Board
without cause. Because the demand letter did not comply with the
requirements for a record date request established in CWH’s Bylaws,
CWH responded to Corvex/Related by pointing out certain
deficiencies and requesting additional information. Rather than
attempting to comply with the governing Bylaws, Corvex/Related
instead unilaterally declared a record date for shareholders to
join their consent and began soliciting written consents as a so
called “referendum”.
After beginning to solicit CWH shareholders, Corvex/Related
pursued its pending litigation against CWH in the Maryland Circuit
Court by asking that Court to declare certain CWH Bylaws invalid.
On May 8, 2013, the Maryland Circuit Court issued an Order
upholding CWH’s arbitration Bylaw and referring all other matters
in the litigation between CWH and Corvex/Related to arbitration
under the auspices of the American Arbitration Association.
Thereafter, Corvex/Related notified the Arbitration Panel and CWH
that the time for delivery of written consents to their purported
consent solicitation would close on June 18, 2013, and
Corvex/Related requested the Arbitration Panel to set a hearing on
their motion for partial summary judgment on certain issues
relating to the consent solicitation. That hearing has been
scheduled for July 26, 2013, but the timing of any ruling is at the
discretion of the Arbitration Panel.
At some time unknown to CWH, Corvex/Related notified Broadridge
Financial Solutions that the time for delivery of written consents
by shareholders as of the self-proclaimed record date would be
extended to close on June 21, 2013. Then, on June 21, 2013,
Corvex/Related delivered a letter to CWH and issued a press release
claiming that it had received consents from over 70% of CWH’s
shareholders and asserting that the CWH Trustees are removed from
office. Neither the June 18th or June 21st date corresponds to any
permitted solicitation period in CWH’s Bylaws.
The Arbitration Panel that is considering the actions by
Corvex/Related has not yet ruled. CWH continues to believe
that the consent solicitation recently pursued by Corvex/Related
has no legal effect.
Since April 12, 2013, Corvex/Related have actively solicited CWH
shareholders by mailing consent cards, issuing press releases and
repeatedly making false and misleading statements about CWH and its
manager, Reit Management & Research LLC. CWH also issued press
releases and mailed letters in opposition to Corvex/Related
activities, but CWH did not solicit written consent revocation
cards. Accordingly, the Corvex/Related consent solicitation did not
compete with a consent revocation solicitation. Also, CWH believes
Corvex/Related set its self-proclaimed record date at a time when a
large number of CWH’s shares appear to have been held by short term
focused hedge funds. Based on the trading volume in CWH shares
since the Corvex/Related self-proclaimed record date, CWH believes
that a significant number of shareholders who joined the
Corvex/Related consent solicitation have since sold their
shares.
Adam Portnoy, President and Managing Trustee of CWH, made the
following statement regarding Corvex/Related’s activities:
“The Arbitration Panel to which the Maryland
Courts have referred these matters has not ruled. We are confident
that the Panel will uphold the CWH Bylaws and that the recent
Corvex/Related consent solicitation will be found to have no legal
effect. The CWH management and Board intend to continue to resist
any efforts by Corvex/Related to circumvent the authority of the
Arbitration Panel.”
“While the arbitration process is underway,
the CWH Board and management also intend to undertake a dialogue
with long term CWH shareholders to correct the false and misleading
statements published by Corvex/Related in their pursuit of a
hostile takeover of CWH and to consider governance changes which
may be recommended by those shareholders.”
CommonWealth REIT is a real estate investment trust which
primarily owns office properties throughout the United States. CWH
is headquartered in Newton, MA.
WARNING REGARDING
FORWARD LOOKING STATEMENTS
THIS PRESS RELEASE 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 CWH’S CURRENT BELIEFS AND EXPECTATIONS, BUT THESE
STATEMENTS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR FOR
VARIOUS REASONS, INCLUDING SOME REASONS WHICH ARE BEYOND CWH’S
CONTROL. FOR EXAMPLE:
- THIS PRESS RELEASE STATES THAT THE
CORVEX/RELATED LETTER DEMANDING A RECORD DATE FOR A CONSENT
SOLICITATION DID NOT COMPLY WITH THE REQUIREMENTS FOR A RECORD DATE
REQUEST IN CWH’S BYLAWS AND THAT THE WRITTEN CONSENTS SOLICITED BY
CORVEX/RELATED HAVE NO LEGAL SIGNIFICANCE. CORVEX/RELATED HAVE
COMMENCED LITIGATION CHALLENGING THE VALIDITY OF THE CWH BYLAW
REQUIREMENTS FOR A RECORD DATE REQUEST AND THAT LITIGATION IS NOW
PENDING BEFORE AN ARBITRATION PANEL CREATED UNDER THE AUSPICES OF
THE AMERICAN ARBITRATION ASSOCIATION. THE RESULTS OF LITIGATION AND
ARBITRATION PROCEEDINGS ARE DIFFICULT TO PREDICT, AND CWH CAN
PROVIDE NO ASSURANCE REGARDING SUCH RESULTS.
- THIS PRESS RELEASE STATES THAT
CORVEX/RELATED INFORMED THE ARBITRATION PANEL AND CWH THAT THEIR
CONSENT SOLICITATION WOULD CLOSE ON JUNE 18, 2013, BUT NOTIFIED
BROADRIDGE FINANCIAL SOLUTIONS THAT THEIR CONSENT SOLICITATION
WOULD CLOSE ON JUNE 21, 2013. THE CWH BYLAWS PROVIDE THAT THE TIME
TO SOLICIT SHAREHOLDER CONSENTS IS 30 DAYS AFTER A VALID RECORD
DATE. THE TIME WITHIN WHICH SHAREHOLDER CONSENTS MAY BE PROVIDED IS
ONE OF THE MATTERS SUBJECT TO THE PENDING LITIGATION AND
ARBITRATION BETWEEN CORVEX/RELATED AND CWH. CWH CAN PROVIDE NO
ASSURANCE REGARDING THE OUTCOME OF THIS LITIGATION AND
ARBITRATION.
FOR THESE REASONS, AMONG OTHERS, INVESTORS ARE CAUTIONED NOT TO
PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS IN THIS PRESS
RELEASE. EXCEPT AS MAY BE REQUIRED BY APPLICABLE LAW, CWH DOES NOT
INTEND TO UPDATE THE FORWARD LOOKING STATEMENTS IN THIS PRESS
RELEASE AS A RESULT OF NEW INFORMATION WHICH MAY COME TO ITS
ATTENTION.
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