CommonWealth REIT Files Investor Presentation
18 Fevereiro 2014 - 10:00AM
Business Wire
Makes the Case that CWH’s Business Strategy,
Combined with Meaningful Governance Changes, Creates the Best Path
Forward to Generate Long Term Value for All Shareholders
Recommends Shareholders Reject
Related/Corvex’s Attempt to Take Control of CWH Without Paying
Shareholders Anything for that Control
Record Date Set as February 18, 2014
CommonWealth REIT (NYSE: CWH) today announced that it has made
available to shareholders an investor presentation on the Company’s
website at www.cwhreit.com. The
presentation will also be filed with the U.S. Securities and
Exchange Commission (“SEC) and will be available on the SEC’s
website at www.sec.gov.
The presentation provides details of why CWH’s Board and
management believe that the Company’s business strategy combined
with meaningful governance changes creates the best the path
forward to generate long term value for all shareholders. The CWH
Board and management recommend that shareholders reject the attempt
by Related Fund Management, LLC and Corvex Management LP
(“Related/Corvex”) to take control of CWH without paying
shareholders anything for that control. The CWH Board and
management ask for shareholders’ continued support for the
following reasons:
- CWH’s business strategy continues to
deliver value for shareholders. The Board and management have
made significant progress implementing CWH’s business plan to
reposition the Company’s portfolio to high value office properties
in central business district (CBD) locations. Because of the
successful execution of this plan, the Company’s portfolio
repositioning is largely complete and CWH is better positioned than
many of its peers to benefit from improvements to the economy and
the office market in 2014 and 2015.
- Reit Management & Research LLC
(“RMR”) is managing CWH for the benefit of all shareholders.
While being managed by RMR, CWH’s stock performance has
outperformed the market over the long term. RMR provides CWH with a
nationwide, fully integrated real estate management platform with
approximately 850 real estate professionals working in offices
throughout the U.S. RMR is able to leverage its large scale to
lower costs for CWH, and without the benefits of RMR’s economies of
scale, the Company’s G&A and operating costs would likely
increase substantially.
- Related/Corvex’s business plan for
CWH is short term oriented, reckless and not credible. It
appears that Related/Corvex's business plan for CWH is to sell the
Company’s best performing, stabilized assets and increase debt
leverage. This business plan would put at risk CWH’s dividend and
investment grade debt ratings, two criteria that REIT investors
typically value highly. Related/Corvex also base their valuation of
CWH on faulty financial analysis and unrealistic projections. In
fact, Sam Zell recently refused to endorse Related/Corvex’s
valuation of CWH and he sold his entire investment in CWH at $25.50
per share only two business days prior to joining the
Related/Corvex campaign to take control of CWH. Related/Corvex’s
business plan is also not credible because of Related’s track
record of shareholder value destruction every time it has
controlled publicly traded real estate companies in the past.
- Related/Corvex are trying to take
control of CWH without paying shareholders anything for that
control. Ever since Related identified CWH as a potential
takeover target in 2012, Related/Corvex have engaged in a
relentless pursuit to take control of CWH. In February and March
2013, Related/Corvex made several purported “offers” to acquire
CWH, but they never presented CWH with a real, fully financed offer
that was actionable by CWH or its shareholders. Now they plan to
take control of CWH through their handpicked slate of replacement
trustees for CWH. The majority of these replacement trustees are
not “truly independent” or well qualified. Recently, Related/Corvex
have added two qualified candidates to their slate, but had to
offer them excessive special compensation arrangements equivalent
to a “signing bonus” of approximately $17 million to get them to
join their campaign.
- Removing the entire CWH Board by
written consent may destroy shareholder value. The removal of
the entire board of a publicly traded company by written consent
without cause and without concurrently electing a replacement board
is unprecedented in the history of U.S. publicly traded companies.
If Related/Corvex succeed in removing the entire CWH Board, CWH
would be in limbo for an extended period of time until a new Board
is elected at a subsequent special meeting of shareholders. The
Board and management will try to minimize damage to CWH, but
shareholders could still face unavoidable risks if the consent
solicitation is successful, including possible: accelerated debts;
SEC sanctions and NYSE delisting; dilution from preferred
shareholder conversion rights; rating agency debt downgrades; and
business operations suffering.
- CWH’s Board and management are
committed to enhanced corporate governance. The Board has
implemented real and significant changes in the last several months
in response to shareholder suggestions, including: increasing the
Board’s independence and size; strengthening the Board’s
leadership; enhancing the Board’s structure and guidelines;
simplifying the path for shareholder action; agreeing to terminate
the shareholder rights plan; requiring minimum Trustee stock
ownership; and further aligning management compensation with
shareholders. These recent changes have moved CWH to “best in
class” in corporate governance and the Board continues to engage
with shareholders on governance and other matters.
- CWH has made good faith and
meaningful efforts to resolve matters with Related/Corvex. Last
month, CWH’s Nominating and Governance Committee invited Keith
Meister of Corvex to join the CWH Board as an Independent Trustee.
To date, Related/Corvex have ignored CWH’s offer to have Meister
join the Board. Minutes before the news was publicly announced that
Sam Zell was joining Related/Corvex’s campaign, Zell notified CWH
of his intentions; CWH immediately asked for the opportunity to
meet with him to discuss the Company’s business and the Board’s
commitment to governance enhancements. Zell refused, indicating
that he was too “busy” to meet, and he has not responded to CWH’s
open offer to engage in a discussion. CWH has also addressed each
of Related/Corvex’s five original recommendations for change. Based
on this, the CWH Board believes there is likely nothing it can do
to satisfy Related/Corvex in their relentless pursuit to take
control of CWH without paying shareholders anything for that
control.
Adam Portnoy, Managing Trustee and President of CWH, made the
following statement regarding today’s announcement:
“The Board and management firmly believe that
Related/Corvex’s consent solicitation to remove the entire CWH
Board without cause is NOT in the best interest of shareholders.
During the next few weeks, we look forward to discussing with
shareholders why the Company’s business strategy creates value for
all shareholders and why Related/Corvex’s business plan is the
wrong path forward for CWH. Although Related/Corvex have chosen a
handpicked slate of replacement trustees for CWH, shareholders
should be aware that there is no Trustee election taking place at
this time. Related/Corvex and their replacement trustees are acting
as if they can disregard a process designed to ensure all
shareholders have a voice. The Board and management also ask
shareholders to consider that the better path to effect change in
an orderly manner is through CWH’s annual shareholders’ meeting in
June 2014, rather than by subjecting shareholders to possible risks
involved in the unprecedented action of removing an entire board by
written consent, without cause, and without simultaneously electing
a replacement board.”
CWH also confirmed that the record date for shareholders
entitled to participate in the written consent proposed by
Related/Corvex to remove the entire CWH Board without cause is
February 18, 2014.
The CWH Board recommends that shareholders sign, date and
return CWH’s WHITE consent revocation
card and discard any materials they may receive from
Related/Corvex.
CommonWealth REIT is a real estate investment trust that
primarily owns office properties located in central business
district of urban locations. CWH is headquartered in Newton,
MA.
WARNING REGARDING
FORWARD LOOKING STATEMENTS
THIS PRESS RELEASE INCLUDES 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 PRESENT BELIEFS AND EXPECTATIONS, BUT THEY ARE NOT
GUARANTEED TO OCCUR AND MAY NOT OCCUR FOR VARIOUS REASONS,
INCLUDING SOME REASONS BEYOND CWH’S CONTROL. FOR THESE REASONS,
AMONG OTHERS, INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE
UPON FORWARD LOOKING STATEMENTS IN THIS PRESS RELEASE OR THEIR
IMPLICATIONS.
ADDITIONAL INFORMATION
REGARDING THE CONSENT SOLICITATION
CWH, its Trustees and certain of its executive officers, and RMR
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 solicitation being conducted by
Related/Corvex. On January 29, 2014, CWH filed a definitive consent
revocation statement with the SEC in response to the Related/Corvex
solicitation and has mailed the definitive consent revocation
statement and form of WHITE consent revocation card to each
shareholder. SHAREHOLDERS ARE URGED TO READ THE CONSENT REVOCATION
STATEMENT FILED WITH THE SEC, AND ANY AMENDMENTS OR SUPPLEMENTS
THERETO AND ANY OTHER RELEVANT DOCUMENTS THAT CWH MAY FILE WITH THE
SEC WHEN THEY BECOME AVAILABLE, BECAUSE THEY CONTAIN IMPORTANT
INFORMATION. Additional information regarding the identity of the
potential participants and their direct or indirect interests, by
share holdings or otherwise, is set forth in the definitive consent
revocation statement filed by CWH with the SEC in connection with
the solicitation of revocations of consents.
Shareholders may obtain free of charge copies of the definitive
consent revocation statement and any other documents filed by CWH
with the SEC in connection with the Related/Corvex solicitation at
the SEC’s website (http://sec.gov), at CWH’s website
(http://cwhreit.com) or by requesting these materials from Timothy
Bonang, by phone at (617) 796-8222, or by mail at Two Newton Place,
255 Washington Street, Newton, MA 02458 or by requesting materials
from the firm assisting CWH in the solicitation of consent
revocations, Morrow & Co., LLC, toll free at (800) 276-3011
(banks and brokers call collect at (203) 658-9400).
Media:Joele Frank Wilkinson Brimmer KatcherAndrew
Siegel/Jonathan Keehner, 212-355-4449orInvestor:CommonWealth
REITTimothy Bonang, 617-796-8222Vice President, Investor
RelationsorJason Fredette, 617-796-8222Director, Investor
Relationswww.cwhreit.com
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